Agreement to acquire The Midland Company (Midland)

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17 October 2007

Munich Re concludes agreement to acquire specialist US primary insurer The Midland Company (Midland)

As part of its realignment in the US insurance market, Munich Re has concluded an agreement with US primary insurance company Midland – via its subsidiary Munich-American Holding Corporation – under which Munich Re will acquire 100% of the shares in Midland. The agreement provides for an acquisition price of US$ 65 per share; the total offer amounts to around US$ 1.3bn (€0.9bn).

Through its wholly owned subsidiary, American Modern Insurance Group, Midland’s operations focus on specialty insurance, which includes niche segments such as insurance for manufactured housing and motorhomes. Thanks to its disciplined underwriting policy, American Modern has been able to post high earnings in the last few years and low combined ratios (2006: 93.0%; 2005: 93.8%; 2004: 96.3%).

With premium income of US$ 832m (€679m) in 2006, Midland is one of the leading US specialty insurers. Midland operates through specialist companies, and via various distribution channels. With this set-up and a presence in 50 states, Midland is excellently positioned.

Establishing and building on a leading position in niche segments of the US primary insurance market is a component of Munich Re’s Changing Gear programme. In 2006, Munich Re America wrote gross premiums of US$ 747m (€609m) in primary insurance specialty segments. The total market for specialty insurances in 2006 was estimated at around US$ 80bn (€65bn).

If Midland’s shareholders approve, the transaction is expected to be completed in the second quarter of 2008, once all the requisite approvals have been obtained from the competent authorities.

Munich, 17 October 2007

Münchener Rückversicherungs-Gesellschaft
Aktiengesellschaft in München
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80802 München
Germany

Disclaimer:
This announcement contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.


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