Re Agreement

CGNU PLC
17 December 2001

                                                              17 December 2001

   CGNU EXTENDS DISTRIBUTION IN SPAIN WITH FOURTH BANCASSURANCE PARTNERSHIP

CGNU plc ('CGNU') announces that it has reached a bancassurance agreement with
Caja Espana, Spain's tenth-largest savings bank. This new partnership further
enhances CGNU's strong position in the Spanish long-term savings market where
bancassurance accounts for over 80% of new business sales.


The alliance with Caja Espana is part of CGNU's ambition to create a
nationwide bancassurance network in Spain and builds upon CGNU's existing
bancassurance partnerships with leading Spanish savings banks Bancaja,
Unicaja, and Caixa Galicia.


CGNU will acquire 50% of the share capital and take management control of Caja
Espana's life and pensions subsidiary, Caja Espana Vida. The inclusion of Caja
Espana's network of 535 branches and 1.3 million customers will build CGNU's
bancassurance network to more than 3,000 branches and provide access to
approximately 8 million potential customers, strengthening its position as the
fourth-largest banking distribution network. CGNU now has a strong presence in
regions that account for approximately 70% of Spanish GDP.


Caja Espana is the leading financial institution in the region of Castilla y
Leon (central Spain), where it has market shares of 17% and 21% in loans and
deposits respectively. Less than 3% of CGNU's existing network is located in
Castilla y Leon and the partnership provides excellent geographic fit. Caja
Espana has aggressive expansion plans to increase its branch network over the
next ten years that will also complement the growth of the other partners.


As with CGNU's existing bancassurance relationships in Spain, Caja Espana will
utilise CGNU's manufacturing base, Aseval, one of Spain's most efficient
bancassurance platforms, to secure further economies of scale for CGNU and its
partners.


The initial consideration for CGNU's 50% stake in Caja Espana Vida is £88
million** payable in cash. This will be subject to adjustment depending on the
future performance of Caja Espana Vida. Similar to Unicaja and Caixa Galicia,
Caja Espana's insurance operations are in an early stage of development.
Accordingly, the price paid reflects the potential of the Caja Espana network
for long-term savings.


The transaction is subject to regulatory approval and is expected to complete
by the end of January 2002.


Tony Wyand, Group Executive Director, with responsibility for CGNU's
continental European operations, said:


'CGNU has created a significant bancassurance network in Spain. Through our
partnership with Bancaja, in July 2000, we have become the fourth-largest
provider in the Spanish life insurance market and this will be reinforced as
our partnerships with Caja Espana, Unicaja and Caixa Galicia develop in 2002.'





Evaristo del Canto, Chief Executive Officer of Caja Espana, said:


'The strategic alliance we have reached will allow both parties to exploit
their competitive advantages; on the one hand, the high penetration of Caja
Espana in the Castilla y Leon region, and on the other hand, CGNU's experience
in the long-term savings business. Caja Espana will be able to offer high
quality and value added products in a key strategic business for us.'




Enquiries:


Analysts / Investors:

Steve Riley, Investor Relations Director          [phone]


Media:

Hayley Stimpson, Director of External Affairs      [phone]

Alex Child-Villiers, Financial Dynamics           [phone]





                               Notes to Editors


CGNU in Spain


Following the merger of CGU and Norwich Union to form CGNU, the operations of
both companies in Spain have been merged into Plus Ultra, the former
subsidiary of Norwich Union in Spain. Plus Ultra has been operating in the
Spanish insurance market for over 100 years, and has nationwide coverage
through a network of more than 3,000 agents and 70 branches. Additionally,
CGNU is present in the bancassurance market through the acquisition of 50% of
Bancaja's long-term savings business, Aseval, in July 2000 and the recent
agreements reached in June and July 2001, to acquire 50% of Unicorp Vida and
Bia Galicia, the life and pensions operations of Unicaja and Caixa Galicia,
respectively. Total CGNU pro forma life and pensions premiums in Spain in 2000
were £601 million (including Aseval for the full 12 months, but excluding the
recently announced transactions with Unicaja and Caixa Galicia), of which £141
million and £460 million were generated by Plus Ultra and Aseval respectively.


Bancaja transaction


In July 2000, CGNU acquired management control and a 50% shareholding in
Aseval, the life and pensions subsidiary of Bancaja, the fourth-largest
savings bank ('caja') in Spain by total assets. Bancaja has a strong position
in the region of Valencia. Through this partnership, CGNU gained access to the
Spanish bancassurance market, the dominant distribution channel in this
market, accounting for more than 80% of new business sales.


The consideration paid by CGNU was £205 million with further potential
payments dependent upon future performance.


Unicaja transaction


In June 2001, CGNU announced its partnership in life insurance and pensions
with Unicaja, Spain's eighth-largest savings bank by total assets which has a
strong position in southern Spain (Andalusia). The transaction was similar to
the Bancaja partnership, with CGNU gaining management control and a 50%
shareholding of Unicaja's life insurance and pensions subsidiaries, Unicorp
Vida and Ahorro Andaluz respectively (referred to jointly as 'Unicorp Vida').


The consideration was £92 million with further amounts payable if Unicorp Vida
achieves its business performance targets.

Caixa Galicia transaction

In July 2001, CGNU agreed to form a bancassurance partnership with Caixa
Galicia, Spain's fifth-largest savings bank and market leader in its home
region Galicia (northwest of Spain). As part of the agreement, and similar to
the Bancaja and Unicaja transactions, CGNU gained management control and
acquired a 50% stake in Bia Galicia, Caixa Galicia's long-term savings unit.


Consideration for the 50% stake was £89 million with further variable payments
dependent upon company performance.

Caja Espana description

Caja Espana, Spain's tenth-largest savings bank and fifteenth-largest banking
group by total assets, is the product of the merger in 1990 of five savings
banks from Castilla y Leon region, in Central Spain.


In 1997, Caja Espana implemented an ambitious five-year strategic plan to
further expand its network beyond Castilla y Leon. As at December 2000, 29% of
the branches were outside its home region, including a significant presence in
Madrid (81 branches).


While its core activities remain deposit taking and mortgage lending, since
1998, it has increased its treasury and capital markets activities (including
government securities intermediation), built up an equities investment book
and has increased its participation in syndicated loans.


Caja Espana offers a basic internet banking service with 35,000 registered
accounts as at July 2001. It is also participating in the project spearheaded
by the CECA, developing a shared internet portal for Spanish savings banks.


Total life premium income in 2000 was £10 million (source: UNESPA).




Geographic fit of Caja Espana, Caixa Galicia, Unicaja and Bancaja distribution
networks

The combined network of 3,025 branches has an excellent geographic fit and
nationwide coverage, with a significant presence in the regions of Castilla y
Leon (centre) 444 branches, Galicia (northwest) 476 branches, Valencia
(southeast) 846 branches, Andalusia (south) 662 branches, and Madrid 209
branches.


The Spanish life insurance and pensions market


The Spanish life insurance and pensions market is one of the fastest growing
in Europe. Recent growth has been driven by declining interest rates,
regulatory changes allowing companies to externalise company pension schemes
to insurance companies, and the considerable migration from traditional
deposits and savings accounts towards investment funds, life insurance and
pension schemes. The latter tendency has been driven by the public's growing
awareness of the need to complement State pensions and welfare benefits with
individual private provisions.


The Spanish life insurance market grew by 40% in 2000 while the pensions
market increased 19% in local currency (Deutsche Bank Research).