24 July 1998

Rights issue

Securities Reference No. 843 000/02

In accordance with the authorization given to it by the Annual General Meeting of Shareholders on 8 December 1995, the Board of Management has resolved, with the consent of the Supervisory Board, to increase the share capital of DM 834,598,400 by DM 35 million to DM 869,598,400 through the issue of 3,500,000 registered shares with a par value of DM 10 each, of which DM 5 is paid up and DM 5 entitled to dividend. The new shares are transferable subject to the provisions of Article 4 of the company's Articles of Association and are entitled to dividend as from 1 July 1998. They are being offered to the shareholders by a syndicate of banks led by Dresdner Bank AG, Frankfurt am Main. The remaining amount not required for the share subscription will be allocated in accordance with the instructions of the Board of Management.

At the same time, on the basis of the authorization given to it by the Annual General Meeting of Shareholders on 3rd December 1993, the Board of Management has resolved, with the consent of the Supervisory Board, to attach one bearer warrant to each of the new registered shares. These warrants will entitle their holders, on the basis of the pertinent warrant conditions, to acquire further Munich Re registered shares with a par value of DM 10 each, of which DM 5 is paid up and DM 5 entitled to dividend.

A premium of DM 595 will be charged for each share plus warrant, resulting in a total subscription price of DM 600 per share (DM 5 paid up plus DM 595 premium).

The main features of the warrant conditions are:

Warrant exercise price: DM 635 per registered share with a par value of DM 10. After the full paying-up of the partly paid-up registered shares, scheduled for the end of 1998/beginning of 1999, the warrant exercise price increases to DM 640.

Warrant rights: Four warrants entitle the holder before the full paying-up of the partly-paid registered shares to subscribe for a further registered share with a par value of DM 10, paid up to DM 5. After the full paying-up of the registered shares, the subsequent 1:2 stock split and the conversion of the Munich Re shares to no-par-value shares, four warrants entitle the holder to subscribe for two fully paid-up no-par-value registered shares.

Warrant exercise period: It will be possible to exercise the warrants from 1 September 1998 to 3 June 2002, with the exception of certain periods specified in § 2 paragraph 1 of the warrant conditions. § 2 paragraph 2 of the warrant conditions provides for the warrant exercise period to be extended automatically by one year and then by a further year, but altogether by no more than two years, if the market price of the number of registered shares corresponding to a par value of DM 10 at the end of the warrant exercise period should be lower than the applicable exercise price.

Antidilution clause: The warrant exercise price will be reduced on the basis of the provisions of § 7 of the warrant conditions (antidilution clause) in the event that during the term of the warrants and when granting its registered shareholders subscription rights Munich Re either increases its capital by issuing new shares, creates conversion rights or warrants or carries out other capital transactions specified in § 7 of the warrant conditions. No reduction will be granted on warrant exercise prices if the holders of the warrants are granted a subscription right

Separation of the warrants: The warrants will be separated from the new shares by the depositary banks at the end of the subscription period and can be transferred separately thereafter.

Contingent capital: The warrants will be safeguarded by contingent capital of DM 8,750,000.

The increase in the share capital out of the capital authorized for this purpose having been entered in the Commercial Register, we invite our shareholders to exercise their subscription rights in respect of the new shares at one of the following banks:

Dresdner Bank AG
Bayerische Hypotheken- und Wechsel-Bank AG
Bayerische Vereinsbank AG
BHF-BANK AG
Commerzbank AG
Deutsche Bank AG
Goldman, Sachs & Co. oHG
B. Metzler seel. Sohn & Co. KGaA
J. P. Morgan GmbH
Morgan Stanley Bank AG
Warburg Dillon Read AG

Proof of the entitlement to subscribe for the new shares will be provided by Dividend Coupon No. 12 in respect of the shares already held. On submission of this dividend coupon, shareholders may, at the subscription price of DM 600 per share, take up one new registered share with a par value of DM 10, of which DM 5 is paid up, for every 25 shares held (bearer shares of DM 5 each or registered shares of DM 10 each with DM 5 paid up). The new registered shares and the bearer warrants are certificated by global certificates deposited with Deutsche Börse Clearing AG for the account and the benefit of shareholders. Requests for delivery of new registered shares cannot be complied with until after the full paying-up of the partly paid-up registered shares, scheduled to take place at the end of 1998/beginning of 1999. Delivery of warrant certificates is excluded

The subscription rights will be traded and officially quoted on the stock exchanges in Munich and Frankfurt

from 29 July 1998 up to and including 7 August 1998.

During this period shareholders can exercise their subscription rights - and to avoid losing them, also thereafter up to and including 11th August 1998 - at one of the above-mentioned banks during its normal hours of business. The banks are willing to arrange, as far as possible, the purchase and sale of subscription rights on the stock exchanges.

The subscription price of DM 600 for one new registered share plus attached warrant is to be paid either when exercising the subscription right or at the latest on the last day of the subscription period. The application to subscribe will be made to our company by the depository banks through Deutsche Börse Clearing AG, stating the particulars required (name, address and occupation of the shareholder) subject to section 67 paragraph 1 of the German Stock Corporation Act (AktG).

It should be noted in respect of the registered shares that under paragraph 2 of section 67 of the German Stock Companies Act only those holders of registered shares are recognized as shareholders of our company who are entered as such in our register of shareholders. Holders of registered shares who want to exercise their subscription rights must therefore be duly listed in our company's register. If this is not yet the case, they must, when exercising their subscription rights, apply for the shares already held to be re-registered in their name and for the respective entry to be made in the register of shareholders. Both the re-registration of registered shares and subscription for new shares on the basis of acquired subscription rights require the consent of the company in accordance with Article 4 of the Articles of Association.

The customary banking commission will be charged for the taking up of the new shares unless the shareholder exercises the subscription rights by presenting Dividend Coupon No.12 at one of the designated banks during normal business hours and no correspondence is connected therewith.

The new shares from the 1998 rights issue, the warrants and the shares issued out of the contingent capital are admitted for trading and official listing on the Munich and Frankfurt stock exchanges. It is envisaged that the new shares and the warrants will be traded and officially quoted on the stock exchanges from 17 August 1998.

The new shares plus attached warrants and the subscription rights are not and will not be registered under the provisions of the United States Securities Act of 1933 or the laws of individual states in the United States, nor will they be offered or sold in the United States unless the offer or sale is made to "qualified institutional buyers" ("QlBs") as defined in Rule 144A under the Securities Act of 1933, which provides for an exemption from the registration requirements of the Securities Act. To the extent that QlBs acquire new shares pursuant to Rule 144A, it is necessary that they issue an investment letter pledging to adhere to certain selling restrictions with respect to the new shares.

Securities reference nos.:	New registered shares (without warrant):	843 004
	Warrants:	843 009
	Subscription rights:	843 008

Munich, July 1998

The Board of Management