Sale of US Business

CGNU PLC
20 February 2001


                               
             UPDATE ON SALE OF US GENERAL BUSINESS

On 25 September 2000, CGNU announced the sale, subject to completion, of its 
US General Business to White Mountains Insurance Group Ltd. for 
$2,063 million (£1,427 million) plus the repayment of an inter-company loan 
of $1,100 million (£761 million).  CGNU announces today that it has agreed 
with White Mountains certain amendments to the sale and purchase agreement 
that will result in a $200 million (£138 million) additional cost to CGNU as 
detailed below.  These amendments do not affect the nature of CGNU's clean-cut

exit from the US property and casualty market.

The amendments arise from an analysis of the reserve position of the US 
General Business as part of the year-end closing. As a result of this 
analysis, the US General Business has strengthened its 31 December 2000 
reserves and purchased reinsurance to provide some protection against further 
adverse developments. These actions in themselves do not affect the
purchase price.

However, in order to facilitate timely satisfaction of the conditions to the 
transaction, CGNU and White Mountains have agreed to the following principal 
amendments:

* Pre-closing adjustments equivalent to $200 million (£138 million) which will
  be borne by CGNU.

* An increase in the proportion of the consideration to be satisfied in loan 
  notes from $210 million to $260 million (£180 million) and an increase in 
  the maturity of the loan notes from six months to eighteen months;

* The US General Business to purchase certain reinsurance covers on closing 
  in order to further protect its reserve position whilst not affecting the 
  purchase price; and

* Commitment of at least an additional $125 million (£86 million) from 
  White Mountains towards the transaction.

Following these amendments, the lead arranger of White Mountains' bank 
financing has committed to provide a financing facility of $875 million 
(£605 million), subject to certain conditions.  The sale, as amended, is 
also subject to US regulatory approval.

CGNU and White Mountains remain enthusiastic and committed to completing the 
transaction, which is now expected to close in the first half of this 
financial year.


ENQUIRIES

Analysts/Investors
Mr Steve Riley - Investor Relations Director, CGNU      [phone]

Media
Ms Hayley Stimpson - Director of External Affairs, CGNU [phone]

Mr Alex Child-Villiers - Financial Dynamics             [phone]

Note: a spot exchange rate of $1.4459 = £1 on 19 February 2001 has been used 
to convert dollar amounts into pounds sterling throughout this announcement