Zurich regains direct Bâloise exposure

Zurich, July 16, 2003 – Entities of the Zurich Financial Services Group (Zurich) will buy from Strategic Money Management Company B.V. (SMM) 11,600,000 Bâloise shares at a price of CHF 47.30 per share amounting to an aggregate purchase price of CHF 548.7 million. Accordingly, the swap transaction announced on December 21, 2001, in connection with a sale of Bâloise shares under which Zurich retained an economic interest in such shares relative to a basket of Swiss and Dutch shares will be terminated.

David Wasserman, Chief Investment Officer and member of Zurich’s Group Executive Committee, said, "The unwinding of the swap does not imply a strategic business interest in Bâloise; it has to be seen purely in the context of managing Zurich’s insurance investment portfolio. The swap served us well, as price movements in Bâloise shares were partially offset by price movements of the basket of Swiss and Dutch shares. But at current Bâloise share prices, and taking into account the result of the swap, we prefer to hold Bâloise shares directly, as it will enhance our flexibility in managing our investment portfolio. After this transaction the relative exposure of the Bâloise investment within our equity investment portfolio, as well as our target total allocation to equities, remain roughly unchanged."

Upon closing of the transaction, which is subject to regulatory clearances, Zurich Financial Services Group will own 27.0% of the outstanding capital of Bâloise. Zurich’s holding comprises 21.5% in Bâloise stocks, classified as "available for sale" and 5.5% as options on Bâloise stocks, accounted as derivatives.