CGNU Sell State Insurance

CGNU PLC
8 February 2001

CGNU SELL STATE INSURANCE


SALE OF STATE INSURANCE LIMITED IN NEW ZEALAND


8 February 2001


CGNU plc today announced the sale of its wholly-owned New
Zealand subsidiary, State Insurance Limited ('State'), to
the Australian insurer NRMA Insurance Group Limited for
approximately £125 million (NZ$405 million).  The
transaction is expected to complete in the first quarter
of 2001.

State is a leading provider of personal and commercial
lines general insurance in New Zealand, with a market
share of around 19% by premium income.  It had net
premium income of £106 million in 1999 and net assets of
£58 million at 30 June 2000.

CGNU remains committed to the New Zealand market and will
continue to develop its leading general insurance
business, NZI.

Commenting on the sale, Group Executive Director for
CGNU's international businesses, Philip Twyman said:

'The sale is consistent with our decision to focus
primarily on NZI within the New Zealand market and we are
pleased that the sale will permit both businesses to move
forward in a positive manner.'


Enquiries:

Analysts/investors:
Steve Riley, Investor Relations Director     [phone]

Media:
Hayley Stimpson, External Affairs Director   [phone]
Alex Child-Villiers, Financial Dynamics      [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, with a market share of around 19%.

* Premiums have been converted at £1=NZ$3.06 (1999
  average rate of exchange), net assets at £1=NZ$3.22 (6m
  2000 closing rate), and the purchase price at £1=NZ$3.2.