28 June 1998

Letter to shareholders

Dear Shareholder,

Munich Re is preparing its shares for the euro and will be utilizing the opportunity to carry out further shareholder-friendly capital measures.

We will be starting at the end of July with a rights issue. As in 1994, the new shares will be issued with warrants attached. It is intended to conclude this part of the plan next year with the unification of the current two share categories into only one — registered shares.

In between, at the beginning of 1999, we intend to call in the unpaid amounts on the registered shares — currently partly paid up — and follow this with a 1:2 stock split. After this we want to convert the Munich Re shares into no-par-value shares. Holders of bearer shares, who cannot take part in the process of fully paying up shares, will be offered subscription to a further share at an appropriate price and the conversion of their bearer shares into registered shares. When completed, and on the basis of an unchanged dividend, the whole package of measures will have the effect of more than doubling the dividend amount distributed.

In detail:

At the end of July we will issue new partly paid-up registered shares in a one-for-25 rights issue at a subscription price of DM 600 per share. The new registered shares, like the old ones, will participate in the full paying-up of shares at the beginning of 1999.

As in the 1994 rights issue, each new registered share will have one warrant attached. Four warrants will entitle the bearer to subscribe for one more partly paidup registered share with a par value of DM 10 prior to the full paying-up of shares or, after the completion of this process, for two fully paid-up no-par-value registered shares. Further details of this capital measure will be given to you in good time before the commencement of the subscription period.

Like most listed companies, we wish to carry out the conversion of our shares to euros by changing them into no-par-value shares. Before this can be done, registered and bearer shares need to have the same par values. We are proposing a particularly shareholder-friendly way to achieve this: our intention is to call in the unpaid amount of DM 5 on each registered share — currently partly paid up to DM 5 — and then to split the fully paid-up DM 10 shares in a ratio of 1:2. On the basis of an unchanged dividend rate, the doubling of the number of shares means a doubling of the dividend amount distributed to our shareholders. Given a continuation of the good business results of the last few years, it should be possible to maintain the dividend amount per share even after the split.

After being fully paid up and then split, the shares will then be converted into no-par-value shares. These steps are planned for the beginning of 1999. We will ask the AGM on 5 November 1998 to adopt the appropriate resolutions. You will be informed about each of these steps in good time.

We want to eliminate the splitting of the trading in Munich Re shares into two different market segments and thus make them more transparent, liquid and attractive for both German and foreign investors. Our aim is to be represented only by the registered shares on the stock market in future, especially as the bearer shares - numbering only 3 million in comparison with the current total of around 82 million registered shares - have become second-line stocks on the market. To achieve this, we will be proposing at the forthcoming AGM that the holders of bearer shares be granted a right in the Articles of Association to convert their bearer shares into no-par-value registered shares.

The company has always treated its bearer and registered shareholders equally. Therefore holders of our bearer shares should have the opportunity to double their shares as well. We will thus propose to the AGM a capital increase of nom. DM 15m through the issue of three million new no-par-value registered shares, which are only to be offered to the holders of bearer shares in a ratio of one new share for each bearer share held, subject to the conversion of these bearer shares into registered shares. The proposed issue price is DM 247; this corresponds to the amount that the holder of a bearer share would have had to expend prior to the announcement of the full paying-up of shares if he or she had sold one bearer share and acquired a partly paid-up registered share (average price difference between the registered and bearer shares in May 1998). It goes without saying that we will be informing the holders of bearer shares separately about these measures proposed for 1999.

All these capital measures are geared to simplifying the structure of Munich Re's share capital. They can be seen as part of a series of recent positive developments for our shareholders, such as the issue of the very attractive warrants 94/98, the 1:10 stock split and the forthcoming change in the business year to the calendar year, making possible a much earlier payment of dividends.

The proposed rights issue against cash contribution will serve to further improve our international competitiveness and support selective growth.

Shareholders who take part in all the individual steps are being offered an attractive overall return on their invested capital.

If you have any questions, please do not hesitate to call our service number in Germany (country code + 49) 1 80/2 22 62 10 or fax us at the following number in Germany: (country code + 49) 89/38 91 45 15.

Yours sincerely,

Münchener Rückversicherungs-Gesellschaft