19 May 1998

Press Release

Commercial Union acquires Berlinische Leben

Munich Re - the majority shareholder - and Allianz have reached agreement on the sale of their stakes totalling 94.6 % in Berlinische Lebensversicherung AG, Wiesbaden, to Commercial Union plc, London. On 2nd February 1998 the companies announced that they had entered into exclusive negotiations. Following the conclusion of the due diligence procedures, a sales agreement has now been signed. The price for 100% of the company will be DM 600m and will be paid by the issue of new Commercial Union shares.

The transaction is expected to be concluded by the end of June, subject to the approval of the competent bodies and authorities. Commercial Union will then make a public offer for the remaining 5.4% of the issued ordinary share capital in accordance with the acquisition code applicable in Germany.

With a premium income of DM 950m (including premiums from the provision for policyholders' dividends) and in-force sums insured of DM 29.1bn, Berlinische ranks among the top 30 life insurers in Germany. It has a share of around 1% of the German life market, where its focus is on credit life business.

Up to now Munich Re has held 64.6% and Allianz AG 30% of Berlinische's share capital. As proposed by its Board of Management and Supervisory Board, the company will be paying a dividend of 25% for 1997.

Commercial Union is one of the largest UK-based composite insurers and operates worldwide. Its premium volume for 1997 amounted to £ 8.5 billion.