2005 initiatives
In the pursuit of our key objectives, Amlin was engaged in a number of initiatives which are referred
to below.

Reward and recognition
Amlin has developed a total rewards approach which provides a mix of financial and non-financial rewards, designed to maintain our competitiveness in the employment market, with an alignment to shareholder interests, as well as providing staff with flexibility and choice.

During 2005, we undertook a strategic review of our reward arrangements to ensure that the way in which we incentivise employees is closely aligned to the Vision which was set in 2004. This review, managed in conjunction with specialist, independent advisers, confirmed good overall alignment and made a number of suggestions for improvement in specific areas such as the underwriters' short term bonus arrangements and the Capital Builder Long term Incentive Plan so that they are fairer and more closely aligned with shareholders' interests. We are presently planning to incorporate these suggestions into our incentive arrangements over 2006 and 2007, subject where appropriate to shareholder approval. Further details are provided in the Directors' remuneration report.

Like many companies, Amlin has reviewed its pension arrangements and specifically its position in relation to its final salary schemes. A great deal of research and development work was carried out during 2005 which is being implemented in 2006. We have decided to remove much of the Group's
risk associated with salary inflation which is inherent in defined benefit schemes. These changes also improve the equality of pension provision for employees across the Group.

While members of Amlin's defined benefit schemes will be able to accrue additional years' service under the schemes, future salary increases will be pensioned through the Group's defined contribution pension arrangements. Consistent with the Group's aim to operate first class employment practices, affected employees will receive partial compensation through higher Company contributions under the defined contribution arrangements over a period of three years. These additional contributions are designed to pass on the estimated saving in normal defined benefit scheme costs to affected employees for the first three years following the change.

Amlin Advantage, the range of core and flexible benefits offered to all employees is considered
to be the benchmark on benefits amongst Lloyd's businesses, according to the top ten recruitment agencies in the marketplace. In 2005 Well Man/ Well Woman medical screening was added to the choice of flexible options and during the year, over 9.8% of employees participated in the scheme. Amlin also introduced the Home Computing Initiative and Bikes for Work government schemes to
all employees in 2005, with the combined employee take up being 24%.

In April 2005, we held our second Amlin Awards event at the Royal Courts of Justice. This biennial event is an opportunity for all Group employees to join in recognising and rewarding those individuals and teams who have made an outstanding contribution to Amlin's success.

Culture and values
During 2005, a team of staff worked on a new Code of Conduct, which has now replaced the previous Business Ethics Policy. The Code summarises the standards which must be applied in all our dealings with stakeholders and takes account of the Institute of Business Ethics standards and the principles laid down by the Chartered Insurance Institute. All existing employees undertake awareness training on the new Code and it is also included in the induction programmes for all employees.

We have built on the preparatory work begun in 2004 on developing a set of core values for Amlin, using staff workshops and focus groups. The Executive Management Group has now affirmed a set
of core values, which have integrity at their heart and which capture management's beliefs in the values that will contribute to sustaining the success of the Company. These will be incorporated into the Code of Conduct and, over the course of 2006, a programme of employee engagement will be implemented.