CGNU - New Zealand GI Sale

CGNU PLC
27 October 2000


CGNU TO SELL STATE INSURANCE LIMITED IN NEW ZEALAND

CGNU plc announces that it is to sell one of its leading
New Zealand general insurance businesses, State Insurance
Limited ('State').

Following the merger, CGNU has the two market leading
general insurance businesses in New Zealand; State and
New Zealand Insurance Limited ('NZI'), both  with around
19% market share.  A review of these businesses concluded
that greater shareholder value can be generated from
selling the State business, rather than integrating them.
CGNU remains committed to the New Zealand market and will
continue to develop the strong NZI business.

The sale of State will be handled by Morgan Stanley Dean
Witter and is subject to regulatory approval.

Philip Twyman, CGNU's Executive Director responsible for
international businesses said: 'The sale of State is
consistent with our focus on shareholder value
generation.  It is an excellent business, with a strong
performance record and a market leading position, which
will be attractive to potential purchasers.'


Enquiries:

Analysts/investors:
Philip Twyman, Executive Director              Tel: [phone]
Steve Riley, Investor Relations Director       Tel: [phone]

Media:
Hayley Stimpson, Director of External Affairs  Tel: [phone]
Geoffrey Pelham-Lane, Financial Dynamics       Tel: [phone]


NOTES TO EDITORS

*  CGNU plc is the UK's largest insurance group and the
world's sixth largest insurer based on gross worldwide
premiums.  The group was created from the merger of CGU
and Norwich Union on 30 May 2000.

*  State Insurance Limited was established in 1905 as a
government department, which was privatised in 1990.  It
sells a wide range of personal and commercial lines
general insurance products, primarily through a direct
network.  It had net premium income of £106m (NZ$325m) in
1999 and net assets of £58m (NZ$187m) at 30 June 2000.

*  NZI was established in 1859 and sells both personal and
commercial lines products, mainly through intermediaries.

*  Premiums have been converted at £1=NZ$3.06 (1999 average
rate of exchange) and net assets at £1=NZ$3.22 (6m 2000
closing rate).