Re Contract

Chesnara chooses Liberata as outsourcing partner

On 6 July, announcements were made by both Chesnara and Marlborough Stirling
that Marlborough Stirling had been selected as preferred outsourcing supplier
to Chesnara, subject to completion of due diligence and contract negotiation.

After the announcement was made in July, Liberata, another leading UK
outsourcer, with which Chesnara had already been in discussions, approached
Chesnara and put forward an improved proposal. In the light of its obligations
to shareholders the Company felt it right to explore this proposal.

As a result, extensive negotiations have taken place with both parties, which
has enabled Chesnara to choose between two competing propositions. The
assessment process has included two-way due diligence, definition of scope and
re-negotiation of terms.

The board of Chesnara decided to accept the final proposal put forward by
Liberata as it contained the best balance of economic terms, expertise and
track record of service delivery.

The financial terms are in line with the renewal expense assumptions currently
included in Chesnara's embedded value and will have no material impact on this
year's earnings or the group's short-term dividend paying capability.

Approximately 180 Chesnara employees, who will continue to occupy existing
premises in Preston, will shortly transfer to Liberata under the arrangements.

Graham Kettleborough, Chief Executive of Chesnara, said:

'With two strong competitors, we have been able to choose the best solution for
the Company and its shareholders. Liberata has an excellent track record in the
industry, working with leading clients such as Barclays, Axa and Save &
Prosper.'

Tom Butler, Chief Executive of Liberata, said:

'We see Chesnara as a key strategic partner for us in the UK, and we are
delighted to have been selected and to be able to support them moving forward.
It enables us to further extend our leading position in the UK outsourcing life
market.

'Liberata is already the equivalent of a top ten life company in terms of
policies administered and this partnership emphasises our market leading
capability.'

Enquiries

Graham Kettleborough 01772 840001

Chief Executive, Chesnara plc 07799 407519

Michael Henman 020 7367 5106

Director, Cubitt Consulting 07740 038930

Chris Boon 0208 666 9101

Business Development Director, Liberata UK Ltd. 07860 589202

Notes to editors:

Chesnara plc, which was listed on the London Stock Exchange on 25 May 2004, was
formed to become the new holding company of the life assurance activities
formerly owned by Countrywide Assured Group plc. Although substantially closed
to new business it continues to write Guaranteed Income and Growth Bonds and a
small amount of protection policies to existing customers.

Liberata plc (www.liberata.com) is one of the UK's leading providers of
outsourced business processes, liberating clients and employees, creating
exceptional opportunities both for them and shareholders. 

Through its driven leadership and intense performance environment, Liberata
transforms operations, reducing the cost of in-house services and delivering
greater efficiency and effectiveness through its six sigma methodology,
allowing clients to focus on their core activities.

Liberata currently employs approximately 4,000 people in 25 business centres
across the UK.