Re Contract

Capita Group PLC 25 July 2002 25 July 2002 THE CAPITA GROUP PLC Capita enters UK third party life and pensions administration market Capita to administer nearly 1 million life policies for Lincoln in a £160m contract over 10 years The Capita Group Plc, ('Capita') has expanded its presence in the financial services sector by acquiring the Life & Pensions administration assets and infrastructure of Lincoln Financial Group, ('Lincoln') - the UK business of the US based Fortune 500 financial services group, Lincoln National Corporation. Capita has also secured a contract worth £160 million over 10 years to administer Lincoln's UK portfolio of around 900,000 life and pensions policies for half a million customers. This acquisition and contract forms a strong platform for Capita to establish and grow a new business area, Capita Life & Pensions Services, while still utilising Capita Group's core skills. Subject to final Financial Services Authority approval, Capita has acquired Lincoln's UK Life & Pensions policy administration business for a consideration of £5 million to be satisfied in cash in instalments in 2004 to 2006, following an initial £1 payment on completion of the deal. Further deferred sums will be paid up to 2007 linked to the growth of Capita's Life & Pensions business. On 1st August 2002, approximately 500 of Lincoln's 700 staff will transfer to Capita and form the core of Capita's Life & Pensions Services business, which will operate from the existing 80,000 sq.ft Barnwood, Gloucester offices. The transfer includes a modern infrastructure and flexible in-house software and processing systems. All other aspects of Lincoln's operations will remain unaffected. This partnership with Lincoln significantly expands Capita's penetration into the financial and insurance services sectors. The current business process outsourcing (BPO) potential for financial services in the UK is estimated to be around £12 billion. Within this, Life & Pensions third party administration (TPA) is a newly emerging market with significant growth opportunities. Rod Aldridge, Executive Chairman of The Capita Group Plc, commented: 'Over the past two years we have successfully grown our Capita Insurance Services business which now stands as the UK market leader of end-to-end policy and claims administration services to the general insurance market. This partnership with Lincoln follows our acquisition earlier this year of City Financial Services, a unit trust administration provider, and enables us to turn our attention to significant growth opportunities within the rapidly expanding financial services third party administration market. Furthermore, the deal increases Capita's penetration into a growing and diverse range of private sector markets which are increasingly seeking to secure the benefits of outsourcing. We look forward to working with the senior team in Lincoln to develop a thriving TPA business in Life & Pensions.' Michael Tallett-Williams, Managing Director of Lincoln Financial Group in the UK, believes that the deal will strengthen Lincoln's UK position. He commented: 'This partnership with Capita underpins everything we are doing to provide reliable and high-quality customer service and security.' - Ends - For further information, please contact: The Capita Group Plc 020 7799 1525 Rod Aldridge, Executive Chairman Paul Pindar, Chief Executive Shona Nichols, Group Marketing Director Capita Press Office 020 7544 3141 Issued by: Finsbury PR Morgan Bone/ Mark Harris 020 7251 3801 Notes to editors: The Capita Group Plc is a leading provider of integrated professional support service solutions. The Group's service capabilities encompass customer services, insurance services, human resource services, software services, systems and strategic support and property services delivered to both public sector and private organisations. With 16,000 people at over 160 UK sites, Capita is quoted on the London Stock Exchange and is a FTSE 100 company with estimated revenues for 2002 of £895 million. In November 2001 Capita was awarded the Management Today Most Admired Business Services Company Award. About Capita Financial and Insurance Services A growing number of companies are considering the benefits of outsourcing services to third parties, prompted by the importance of cost savings in today's economic climate, and the need to remain ahead of the competition by driving significant improvements in service to attract and retain customers. In a little over two years, Capita Insurance Services has grown rapidly through acquisition and organic growth to become one of the UK's leading providers of outsourcing services to the general insurance market. Now employing over 3,000 staff, it is unique as a provider able to offer integrated end-to-end outsourcing from claims management through to loss adjusting as well as the flexibility to provide separate, niche services. With the Lincoln TPA contract as its basis, Capita Life & Pensions Services will sit alongside Capita's general insurance services business and provide further opportunity for Capita to grow in the UK insurance market. About Lincoln Financial Group Lincoln Financial Group is the marketing name for Lincoln National Corporation (LNC:NYSE). In the UK, Lincoln Financial Group looks after assets of £4.9 billion* with over 900,000 life assurance, pension, unit trust and ISA policies in force. Lincoln offers its life, pension, unit trust and ISA products directly to its customers and through independent financial advisers. The group's UK head office is in Gloucester, while the corporate headquarters are in Philadelphia, USA. Founded in 1905, the Group - named after former President Abraham Lincoln - comprises a number of wealth accumulation and protection businesses, offering annuities, life assurance, retirement income, mutual funds, institutional investment management and financial planning and advisory services. Lincoln Financial Group manages total assets of over $126 billion* and has over $6.4 billion* in annual revenues. *Figures correct as at 31 December 2001 This information is provided by RNS The company news service from the London Stock Exchange

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