CGNU's UK GI Presentation

CGNU PLC
17 May 2001


Presentation to analysts on CGNU's UK general insurance business

CGNU plc held a presentation today on its UK general insurance business, 
branded Norwich Union Insurance ('NUI').  NUI is the leading UK general 
insurer with a market share of some 19% and net premiums of £5 billion
in 2000.  In total, the business accounted for 18% of the Group's ongoing 
net written premiums in 2000 and 55% of the Group's general insurance 
premiums.

Commenting on the progress at Norwich Union Insurance, Patrick Snowball, 
Chief Executive, said:

'We are building a powerful general insurance business with strong and 
sustainable competitive advantages in claims handling, risk selection, 
expenses and brand.  The integration benefits are on track and results are
improving towards the Group's target of a 102% combined operating ratio by 
the end of 2001.'

Slides from the presentation are available on the Group's website 
(www.cgnugroup.com) under the investor section.


Enquiries:

Analysts / investors
Steve Riley, Investor Relations Director          + 44 (0) 20 7662 8115

Media
Hayley Stimpson, Director of External Affairs     + 44 (0) 20 7662 7544
Alex Child-Villiers, Financial Dynamics           + 44 (0) 20 7269 7107


Key points from the presentation:-


* Re-shaping the portfolio

  NUI has re-shaped its portfolio over the last year in line with its         
  strategic focus on personal and small commercial lines or where pricing was 
  inadequate.  A reduction in large commercial risks, including the exit of   
  the London Market, has increased the personal lines proportion of the       
  portfolio to 67% by the end of the first quarter of 2001, from 59% 
  12 months previous.


* Rates remain firm

  Rates across all classes of business remain firm.  At the end of the first 
  quarter, private motor rates were up 15% year on year, up 20% for commercial
  motor, up 7% for commercial property, up 4% for homeowners and up 15% for 
  liability, where rates continue to strengthen.
  
  Pricing and underwriting are centralised, which ensures strict control on 
  risk selection and satisfactory rates per risk.


* The most efficient of the large UK insurers

  At 10.7% at the end of the first quarter, NUI's expense ratio is the lowest 
  in the UK of the large insurers.  There is a proven track record in driving 
  operational efficiency and the pro-forma equivalent expense ratio for NUI 
  stood at over 14% in 1997.  The improvement is after expensing the          
  investment in market leading technology and processes (eg Total Incident    
  Management).


* Results are improving

  First quarter operating profits were up 27% to £100m, with results          
  responding to targeted rating action and rigorous risk selection.  The      
  combined operating ratio improved to 105% (Q1 2000 107%) and is on track to 
  achieve the Group's target of 102% by the end of 2001.


* Leveraging a competitive advantage in claims handling

  The ex-Norwich Union business had a competitive advantage in its Total 
  Incident Management ('TIM') claims handling process for personal lines.  
  This is now being rolled out across the enlarged business.  The system 
  enables NUI to control the cost of claims, whilst offering its customers 
  an excellent service following a claim.


* Reducing volatility through reinsurance

  NUI has in place the largest UK catastrophe programme in the UK.  This 
  restricts the aggregate losses retained by NUI from a single catastrophe 
  event to a maximum of £200m and individual property, motor and liability 
  claims to £5m.


* Leveraging NUI's scale advantage

  NUI's scale advantages:-
  
  - purchasing power reducing the cost of claims.
  - improved risk selection and pricing using the largest data base of any 
    UK insurer.
  - resources to invest in technology that leads the market (eg Total 
    Incident Management).
  - market share to actively manage portfolio.


* Multi-distribution capability

  NUI has a multi-distribution capability in personal lines with a leading 
  position across the broker, corporate partnership and retail direct 
  distribution channels.  This includes a growing presence in e-commerce 
  where NUI has sold over 70,000 policies (personal motor, household and 
  travel) via the internet and other digital channels and quotes via the 
  internet are running at some 100,000 per month.


* Integration is on track

  Key points:-
  - rationalised product range (300 to 71 products) was launched on 
    2 October 2000.
  - all staff in place.
  - reinsurance programme in place for the combined business.
  - re-shaped the portfolio.
  - moving to a common pricing platform by July 2001.
  - conversion of some 2 million policies onto one personal lines and one 
    commercial lines system on track to complete by the end of 2001.
  - retained income levels and corporate partnerships.
  - on track to achieved target annualised cost savings of £97 million 
    by the end of the year.