Zurich Insurance Company: Public offer for early conversion of Zurich Jersey convertible bond

Zurich, December 1, 1998. - Zurich Insurance Company announced today an offer to holders of the outstanding 1% convertible bonds due April 15, 2003, issued by Zurich Insurance (Jersey) Limited and guaranteed on a subordinated basis by Zurich Insurance Company. Under this offer bondholders who convert their bonds into shares of Zurich Allied would receive a premium in cash of USD 42.50 per USD 1,000 nominal bond, or 4.25% of the face value of each bond. This offer is valid from December 1, 1998 until December 9, 1998.

The bonds are convertible at any time into 2.2203 shares for each USD 1,000 face value bond. As of November 27, 1998, USD 106.5 million nominal value of bonds had already been converted, leaving only USD 625.1 million nominal amount outstanding. Zurich Insurance (Jersey) Limited has the right to call the bonds for redemption beginning April 16, 2000 or at any time if the nominal amount outstanding falls below USD 50 million.

The conversion of the deeply in-the-money convertible debt will allow Zurich Financial Services to increase its financial flexibility as well as simplify and enhance its capital structure. The computation of fully diluted earnings and other statistics per share of Zurich Allied AG would not be affected as the shares underlying the convertible bonds are own shares already issued and held by the Group.

Zurich Insurance Company as well as Zurich Insurance (Jersey) Limited are both members of Zurich Financial Services.