RBC Insurance Financial Strength Information Insurance offered by Liberty Life Insurance Company N1102Kit (1-09) Thank you for your interest in RBC. This booklet contains financial information and other facts about RBC and RBC Insurance. It is designed to help you familiarize yourself with our company. To learn more, please visit our web site, www.rbcinsurance.com\us or contact your insurance advisor. Discover RBC Insurance in the U.S. and create more for your future Integrity of Investment Portfolio Financial Strength Ratings > High quality, diversified and conservatively Fitch: A+ (Strong), 5th highest of 21 managed A.M. Best: A (Excellent), 3rd highest of 16 > Quality of bond portfolio significantly above One of only 39 U.S. life insurance companies to average for our industry maintain a Best rating of “A” or higher for 50 or more years > Diversification among a broad range of companies across many industries Product Offerings > Commercial mortgage loan portfolio well • Traditional annuities • Index annuities diversified by geography and type • Life insurance • Variable annuities Total Investment Portfolio Quality of Bond Portfolio $3.303 billion Average Quality = AA GAAP Book Value 12/31/08 12/31/08 Cash 2.6% Commercial 55.8% Mortgage Loans 17.1% Bonds 22.5% 80.3% 16.6% 4.4% .6% AAA AA A BBB <BBB RBC Insurance® is the brand name for Liberty Life Insurance Company, a part of the global insurance operations of Royal Bank of Canada. Liberty Life Insurance Company is solely responsible for its financial obligations. ®Registered trademarks of Royal Bank of Canada. Used under license. Products not available in all states. 888-262-8131 • www.rbcinsurance.com/us Insurance offered by Liberty Life Insurance Company N1099 (1-09) RBC is well known in Canada as a trusted brand name, financially secure with a long history of delivering on commitments. These are the same reasons we stay out of U.S. news headlines. Key Facts Canadian Leader with Global Strength 139 years in business $724 billion total assets Largest bank in Canada, the country with the world’s 16 million clients in 36 countries soundest banking system* 70,000 employees > Capital ratios and senior debt ratings among highest Senior Debt Ratings globally Moody’s: Aaa S&P: AA- > $4.4 billion earnings and 18% return on equity** Fitch: AA > Tier 1 capital ratio of 9%** DBRS: AA Capital Ratios Consistently strong financial profile Basel II Basel I > Limited exposure to any single name and any single Tier 1 9% 8.3% sector Total capital ratio 11.1% 10.6% > High quality balance sheet with good liquidity Assets to capital multiple (x) 20.1 19.9 > Proactive risk management and strong cost management The Basel Committee on Bank Supervision makes banking policy guidelines and helps authorities implement its suggestions. discipline Basel I and II are recommendations regarding capital risk, market > risk and operational risk. Basel I establishes a guideline for total Excellent access to diversified funding sources at capital of at least 8% of a bank’s risk-weighted assets. favorable spreads Revenue by Business Segment > Well balanced and diversified business mix Fiscal 2008 Wealth Recognized for Size and Reputation Management 18% Canadian > Ranked 41st largest corporation globally in total assets by Banking 43% International Forbes Magazine April 2008 Banking 9% > 5th largest bank in North America and 15th largest globally*** Insurance 12% > Named Canada’s “Best Corporate Citizen” by Corporate Capital Markets 18% Knights magazine for environmental, social and Soundness of Banks* governance performance > Part of the Dow Jones Sustainability Index for 8 straight Rank Country years as one of the world’s financial, social and 1 Canada environmental corporate leaders 2 Sweden 3 Luxembourg > Recognized as “one of the world’s most eminent institutions” by Global Finance Media, Inc. 4 Australia 5 Denmark Additional RBC financial information can be found at 39 Germany www.rbc.com/investorrelations/index.html 40 United States * World Economic Forum Global Competitiveness Report 2008-2009 44 United Kingdom ** US$; Fiscal 2008 79 Italy *** Bloomberg, OSFI; assets as of 6/30/08. 93 Japan RBC Insurance is solely responsible for its financial obligations. RBC Insurance at a Glance Solutions to Help You Rule Your World RBC Insurance® is the brand name for Liberty Life Insurance Company, a part of the global insurance operations of Royal Bank of Canada. As the insurance specialist of one of the largest and most trusted financial institutions in North America, RBC Insurance offers a diversified range of insurance protection and wealth accumulation products that help individuals and businesses manage risk and build for the future. RBC Insurance is a part of RBC, a leading financial services company comprised of Royal Bank of Canada (TSX, NYSE: RY) and its subsidiaries. Although Liberty Life Insurance Company is a part of RBC, Liberty Life Insurance Company is solely responsible for its financial obligations. Financial Strength and Stability You Can Trust RBC > US$632.2 billion in assets as of October 31, 2007.* > Ranked 41st largest corporation globally in total assets by Forbes Magazine, April, 2008. > In business more than 130 years and providing insurance solutions for over a century. > Among North America’s most trusted companies; named Canada’s “Best Corporate Citizen” by Corporate Knights magazine for its environmental, social and governance performance. > Named to the Dow Jones Sustainability Index for the 8th straight year, RBC is recognized as one of the world’s financial, social and environmental corporate leaders. > Recognized as “one of the world’s most eminent institutions” by Global Finance Media Inc., an international publisher of financial data. *Value converted from Canadian dollars at the current exchange rate as of October 31, 2007. RBC Insurance in the United States** > Assets: $3.72 billion > Liabilities: $3.46 billion > Capital & Surplus: $261.5 million **Consolidated results as of December 31, 2007. Continued on back Insurance offered by Liberty Life Insurance Company V1157 (R5-08) An Industry Leader Operating under the master brand name of RBC, Royal Bank of Canada (TSX, NYSE: RY) is Canada’s largest bank as measured by market capitalization. Top North American Banks by Market Capitalization Ranking Based on Market Capitalization (US$ billions) 1 Bank of America Corp $168 2 JP Morgan Chase & Co $146 3 Citigroup Inc. $112 4 Wells Fargo & Co $96 5 Royal Bank of Canada $60 6 U.S. Bancorp $56 7 Wachovia Corp. $54 8 Bank of New York Mellon $48 9 Bank of Nova Scotia $45 10 Toronto-Dominion Bank $44 Source: Bloomberg, March 31, 2008 Top Global Banks by Market Capitalization Global 2000 Each year, Forbes Magazine Ranking Based on Head Office Market Capitalization publishes a list of the world’s Location (US$ billions) largest companies, measured by 1 HSBC Holdings PLC. London $195 a composite ranking of sales, 2 China Construction Bank-H Beijing $176 profits, assets and market value. 3 Bank of America Corp. Charlotte, N.C. $168 In the 2008 list, Royal Bank of 4 Bank of China LTD-H Beijing $159 Canada ranked: 5 JP Morgan Chase & Co New York $146 6 Banco Santander SA Madrid $125 • 55 overall 7 ABN AMRO Holding NV Amsterdam $112 • 75 for profits 8 Citigroup Inc. New York $112 • 41 for assets 9 Wells Fargo & Co San Francisco $96 • 102 for market value 10 Mitsubishi UFJ Financial Group Tokyo $94 • 1 among Canadian 11 BNP Paribas Paris $91 companies 12 Intesa Sanpaolo Milan $90 Source: Forbes Magazine, April, 2008. 13 UniCredit s.P.a. Milan $89 14 Banco Bilbao Vizcaya Argenta Bilbao $83 15 Sberbank-CLS Moscow $67 U.S. Products 16 Royal Bank of Scotland Edinburgh $67 17 Royal Bank of Canada Toronto $60 > Traditional Annuities 18 Deutsche Bank AG-Re Frankfurt $60 > Index Annuities 19 UBS AG-Reg Zurich $60 > Life Insurance 20 Credit Suisse Group-Reg Zurich $59 > Variable Annuities and Life Insurance Source: Bloomberg, March 31, 2008 To learn more about RBC Insurance, visit www.rbcinsurance.com/us ®Registered trademarks of Royal Bank of Canada. Used under license. V1157 (R5-08) CANADA RATED world’s SOUNDEST BANK SYSTEM: SURVEY World Economic Forum Global Competitiveness Report 2008-2009. World Economic Forum, Executive 09 Oct 2008 | 04:40 AM ET Opinion Survey 2007, 2008 Reuters By Rob Taylor -- Soundness of Banks Rank Country CANBERRA (Reuters) - Canada has the world’s soundest banking system, closely 1 Canada followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum 2 Sweden has found as financial crisis and bank failures shake world markets. But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador 3 Luxembourg and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to 4 Australia bolster bank balance sheets. 5 Denmark The United States, where some of Wall Street’s biggest financial names have collapsed 6 Netherlands in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa. 7 Belgium The United States was on Thursday considering buying a slice of debt-laden banks to 8 New Zealand inject trust back into lending between financial institutions now too wary of one another 9 Ireland to lend. 10 Malta The World Economic Forum’s Global Competitiveness Report based its findings on opinions of executives, and handed banks a score between 1.0 (insolvent and possibly 11 Hong Kong SAR requiring a government bailout) and 7.0 (healthy, with sound balance sheets). 12 Finland Canadian banks received 6.8, just ahead of Sweden (6.7), Luxembourg (6.7), Australia 13 Singapore (6.7) and Denmark (6.7). 14 Norway UK banks collectively scored 6.0, narrowly behind the United States, Germany and Botswana, all with 6.1.