Zurich Group: Completion of the merger with the financial services business of B.A.T Industries expected for September 7, 1998

Zurich/London, August 25, 1998 - The Zurich Group and B.A.T Industries announced today that they aim to have the merger between Zurich and the financial services business of B.A.T Industries to create Zurich Financial Services completed on September 7, 1998. Both parties anticipate that all the necessary conditions can be met by that date.

With regard to its reorganization, B.A.T Industries has been notified that certain plaintiffs in tobacco-related litigation in the USA intend to oppose B.A.T Industries’ reorganization. The Board of B.A.T Industries, however, is confident that any such attempts will be unsuccessful and will have no impact on the closing schedule.

Zurich expects that its shares will be suspended on the Swiss Exchange at the close of business on Friday, September 4, and that shares in Zurich Allied and Allied Zurich will start to trade on Tuesday, September 8.

Zurich Allied AG will replace Zurich in the Swiss Market Index (SMI), which represents the 23 largest capitalized Swiss companies listed on the Swiss Exchange. Until further notice the shares of Zurich Insurance not yet exchanged will continue to be traded on the Swiss Exchange. Allied Zurich p.l.c. is expected to be included in the FTSE-100 Share Index in London. The Zurich Financial Services Group will be a significant factor in both of these equity markets. The dual listing structure will enable Swiss and UK shareholders to hold their interest in the Zurich Financial Services Group through shares quoted and traded in their respective local currency, CHF or GBP.