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1 April 2001 | Translation of the German ad-hoc announcement

Munich Reinsurance Company

In line with the letter of intent signed last year, Munich Reinsurance Company and Allianz AG will reduce their cross holdings and also restructure their shareholdings in joint subsidiaries and other companies. In this connection, the Munich Re Group will increase its stake in the HypoVereinsbank Group (HVB) to 25.7%. Furthermore, Munich Re plans to make an offer to outside holders of ERGO shares. A capital increase will not be necessary.

The following individual transactions are planned:

Die Münchener Rück wird ihren direkt und indirekt gehaltenen Bestand an Dresdner Bank-Aktien an die Allianz veräußern sowie rd. 4% Allianz-Aktien abgeben; die Beteiligungsquote an der Allianz wird nach Vollzug des Verkaufs im kommenden Jahr bei rd. 21% liegen. Zudem beabsichtigt die Münchener Rück, ihre Beteiligung von 40,6% an der Allianz Leben an die Allianz zu veräußern. Im Gegenzug wird die Münchener Rück im nächsten Jahr von Allianz und Dresdner Bank deren gesamte Bestände an HVB-Aktien erwerben. Einschließlich der bereits gehaltenen Beteiligung wird die Münchener-Rück-Gruppe dann mit 25,7% an der HVB Group beteiligt sein. Die bestehende Vertriebskooperation zwischen der zur Münchener Rück-Gruppe gehörenden ERGO-Tochter VICTORIA und der HVB Group soll zum 1.1.2002 auf das gesamte Bundesgebiet ausgeweitet und exklusiv ausgestaltet werden. Darüber hinaus plant die Münchener Rück, ihre Beteiligung an der ERGO Versicherungsgruppe AG von derzeit 62,9% auf bis zu 95% zu erhöhen. Zu diesem Zweck wird den freien Aktionären ein Tausch in Münchener-Rück-Aktien angeboten, die von der Dresdner Bank und HVB Group über eine Wertpapierleihe zur Verfügung gestellt werden: Für zwei ERGO-Aktien werden eine Münchener-Rück-Aktie und 18 Euro in bar geboten. Die Beteiligung der Allianz an der Münchener Rück wird in 2002 auf rund 23% sinken. Dann werden auch die vor einem Jahr geschlossenen Vereinbarungen über die geplanten Veräußerungen der Minderheitsbeteiligungen der Münchener Rück an der Bayerischen Versicherungsbank AG (45%) und der Frankfurter Versicherungs-AG (49,9%) an Allianz vollzogen werden.

All of the transactions should be finalized next year subject to approval by the competent authorities and supervisory bodies.

Exchange of holdings between Munich Re and Allianz

The planned transactions are to be seen as a further consistent step in the restructuring of cross holdings over the past few years between Munich Re and Allianz. The steps now planned are designed to take account of the agreement reached last year between Munich Re and Allianz to each reduce their cross holdings to around 20% by 2003. Both companies will continue their successful cooperation – especially in reinsurance – as well as their long-standing successful partnership. Moreover, Munich Re thus enables Allianz to bring Allianz Life and Dresdner Bank together.

Munich Re Group increases stake in the HVB Group to 25.7%

By disposing of its shares in Dresdner Bank, the Munich Re Group is cutting back on a smaller banking interest. At the same time, it is turning its stake in the HVB Group into a strategically valuable investment. With the HVB Group, Munich Re is backing the concept of the Bank of the Regions and will intensify sustained cooperation on all joint fields of business. Underlining the scope and long-term nature of the strategic partnership between both groups, the HVB Group will retain its stake of 13.3% in Munich Re AG and increase its interest in ERGO to 5%. The partners wish to tap into the potential available in retail business especially in pensions and savings and to add market shares by strengthening the existing successful cooperation. A total of over 30 million HVB Group and ERGO clients stand to profit from this step – by being offered a range of compatible products covering the full area of provision.

Cooperation between the ERGO Group and the HVB Group in Germany will be the starting point for further joint activities. In view of the ongoing process of consolidation in the European financial services sector, both partners wish to further expand their respective domestic and foreign market positions and at the same time to create further opportunities for cooperation. As to their foreign markets strategy, both groups have already identified compatible target markets in southern, central and eastern Europe. The already existing cooperation agreements between the respective subsidiaries and/or second-tier subsidiaries Hestia and PBK/BPH in Poland and the FondsServiceBank joint venture between the asset-management company MEAG (which is part of the Munich Re Group) and the HVB Group serve as examples.

Attractive offer to ERGO shareholders

The intention behind increasing the stake in ERGO to 95% is to make the full potential of the ERGO Group's value useful for Munich Re shareholders. To this end, the proceeds from the overall transaction will be reinvested in the primary insurance sector of Munich Re.

ERGO shareholders will also profit from the conversion offer in several ways. First of all, they will receive an attractive premium and also a much more liquid Munich Re share, one which is prominently represented in internationally significant share indices and whose performance over the past few years and decades has been consistently excellent and well above average. The conversion offer comes at a good time for ERGO shareholders, since they are now able to realize the good performance of the ERGO share over the last few months as well as the – in absolute terms – high share-price level. On the other hand, experience has shown that the shares of companies with a majority shareholder tend in the long term to perform below average. In addition, the development of ERGO's share price could come under pressure structurally due to the weighting in the MDAX which will in future be geared to the free float. Furthermore, ERGO shareholders can continue to take shares in "primary insurance" and "asset management" after the exchange. The ERGO Board of Management views the offer, which is subject to the rules of the German Takeover Code, as fair and attractive. The Deutsche Bank will deliver a fairness opinion.

Financial impact

Munich Re anticipates that, taken together, all of the transactions – independent of the significant one-off effects from the tax-neutral realization of gains on share prices – will make a sustained and positive contribution to profits. The liquidity effect will likewise be positive, and therefore no capital measures are necessary. The free float in Munich Re will go up from 52.2% to 54.2%, which will in turn have a positive impact on the weighting of Munich Re shares on the stock-exchange indices.

Munich, 1st April 2001
Münchener Rückversicherungs-Gesellschaft
The Board of Management

Munich Re: Formal notice regarding the ad hoc press release issued on 1st April 2001

In connection with the ad hoc press release issued by Munich Re on 1st April 2001 at 4.58 p.m., we wish to point out that the offer to shareholders of ERGO Versicherungsgruppe AG does not constitute an offer of Munich Re shares directly or indirectly in or into the United States of America. We would be grateful to you if you could bring this to the attention of recipients of the press release.

Munich, 3rd April 2001
Münchener Rückversicherungs-Gesellschaft

Disclaimer

The following ad-hoc announcement is not an extension of the exchange offer, and does not constitute an offer of Munich Re shares, in or into the United States of America, Canada, Australia or Japan. The exchange offer will not be made directly or indirectly in or into, and may not be accepted in or from, the United States, subject to certain possible exceptions. The Munich Re shares to be offered pursuant to the exchange offer have not been and will not be, registered under the United States Securities Act of 1933 or under the laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly, in or into the United States, except pursuant to exemptions from the applicable requirements of such jurisdictions. Accordingly, copies of the announcement are not being, and should not be, released, distributed or sent in or into the United States.

By pressing the "Confirm/Bestätigen" button below, you will acknowledge that you have read the notice above and that you are not a resident of the United States of America, Canada, Australia or Japan. If you are a resident of the United States of America, Canada, Australia or Japan you may only press "Back/Zurück".

Disclaimer zur Ad-hoc-Meldung vom 1. April 2001

Die folgende Ad-hoc-Meldung ist keine Erweiterung des Umtauschangebots und stellt kein Angebot von Münchener-Rück-Anteilen in die/den Vereinigten Staaten von Amerika, Kanada, Australien oder Japan dar. Das Umtauschangebot wird vorbehaltlich einiger möglicher Ausnahmen weder direkt noch indirekt in die/den Vereinigten Staaten von Amerika gemacht und kann dort oder von dort auch nicht akzeptiert werden. Die gemäß dem Umtauschangebot anzubietenden Münchener-Rück-Anteile sind und werden nicht gemäß dem US-Wertpapiergesetz von 1933 oder den Gesetzen eines US-Bundesstaats registriert und dürfen vorbehaltlich einiger Ausnahmen von den geltenden Vorschriften dieser Gerichtsbarkeiten nicht in die/den Vereinigten Staaten von Amerika angeboten, verkauft oder geliefert werden. Dementsprechend sollten und werden Kopien dieser Ankündigung nicht in den Vereinigten Staaten von Amerika verteilt oder dorthin gesandt werden.

Durch aktivieren der nachfolgenden Schaltfläche "Confirm/Bestätigen" bestätigen Sie gegenüber der Münchener Rück, dass Sie obenstehenden Hinweis gelesen haben und nicht in den Vereinigten Staaten von Amerika, Kanada, Australien oder Japan wohnhaft oder ansässig sind. Falls Sie in den Vereinigten Staaten von Amerika, Kanada, Australien oder Japan wohnhaft oder ansässig sind, bitte nur die Schaltfläche "Back/Zurück" aktivieren.