Re Contract

Chesnara PLC
06 July 2004

Chesnara selects Marlborough Stirling to transform its business operations

Chesnara and Marlborough Stirling are pleased to announce Marlborough Stirling's
selection, subject to completion of due diligence and contract negotiation, to
transform its business operations under a proposed long-term outsourcing
contract involving extensive technology and process re-engineering. Marlborough
Stirling's appointment marks an important stage in Chesnara delivering one of
its key strategic objectives of maximising cash flows and shareholder returns
through increased operating efficiency.

Approximately 180 Chesnara employees, who will continue to occupy existing
premises in Preston, are expected to transfer to Marlborough Stirling under the
arrangements. The employee transfer and full contract commencement are due to
occur by the end of 2004.

The arrangements will utilise Lamda, Marlborough Stirling's life and pensions
administration software platform, and involve migration from legacy systems onto
Lamda of approximately 230,000 policies, most of which are either non-linked
term assurance, unit-linked endowment policies or guaranteed bonds.

Further announcements regarding the contract will be made as and when
appropriate.

Graham Kettleborough, Chief Executive of Chesnara, stated:

'Marlborough Stirling's appointment as preferred supplier demonstrates further
progress in delivering against our stated strategy of using outsourcing to
enhance operating efficiency and reduce the risk of expense overruns in the
medium to long term. Their selection reflects the unique range of capabilities
they can bring to supporting us as we develop the Chesnara business going
forward. It is also good news for our employees, many of whom will become part
of a thriving, specialist outsourcing provider able to offer a wide range of
future career opportunities.'

Mike O'Leary, Chief Executive of Marlborough Stirling, stated:

'We are delighted to have been selected to assist Chesnara in transforming its
business and to be entrusted with such an instrumental role in realising its
corporate strategy.

Marlborough Stirling has been a leading provider of innovative, differentiated
open and closed book life and pensions outsourcing solutions for over 15 years
and we currently provide such services to a wide range of clients. Combined with
the recently announced contract with Royal Liver and other life and pensions
outsourcing business we expect to secure in the near future, this development
demonstrates the momentum in this part of the group.

We very much look forward to working with Chesnara and to welcoming the
employees due to transfer to Marlborough Stirling. We expect their depth of
skill and experience to play an important role in the future development of our
outsourcing activities.'

Further information

Chesnara                                                   [phone]
Graham Kettleborough, Chief Executive

Cubitt Consulting                                          [phone]
Serra Balls

Marlborough Stirling                                       [phone]
Mike O'Leary, Chief Executive
Bob Beveridge, Finance Director

Citigate Dewe Rogerson                                     [phone]
Toby Mountford
Alex Brown


Notes to editors

About Chesnara

Countrywide Assured plc ('CAplc'), the principal operating subsidiary of
Chesnara plc, was established in 1988 as the life assurance division of
Countrywide Assured Group selling mortgage-related life assurance products
through Countrywide Assured Group's financial services division. In August 2003,
CAplc was substantially closed to new business following the implementation of a
distribution agreement between Countrywide Assured Group's financial services
division and Friends Provident. This agreement was established in August 2002
following Countrywide Assured Group's decision to switch new business from CAplc
to Friends Provident. In 1995, CAplc acquired Premium Life, a life assurance
company, and integrated it into its existing operations. Today Chesnara's
primary subsidiary CAplc manages an existing book of life assurance policies,
personal pensions and long-term care products; it continues to service its
existing clients and markets Guaranteed Income and Guaranteed Growth Bonds.
Chesnara is based in Preston and it administers approximately 230,000 policies,
most of which are either non-linked term assurance, unit-linked endowment
policies and guaranteed bonds.

About Marlborough Stirling

Marlborough Stirling (www.marlborough-stirling.com) provides software and
services to the mortgage, life, pension and investment market sectors.  Its
software and services enable financial service providers and intermediaries to
meet consumers' demand for financial products that are flexible, capable of
being distributed through a variety of channels and processed efficiently.

The group employs approximately 1,700 people and has offices in Cheltenham,
Basingstoke, Brighton, Bristol, Cobham, Dudley, Hitchin, Dublin, Douglas in the
Isle of Man, Cape Town, Madrid, Milan, Toronto and Vancouver.

Clients of the group include Alliance & Leicester, Bank of Scotland, CIBC,
Co-operative Insurance Society, Coventry Building Society, Egg, Legal & General,
Nationwide Building Society, NBS Bank, Royal London, Sanlam and Sun Life
Financial of Canada (UK).


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