Proposed acquisition of Brit Insurance Limited ("BRIT Insurance"

BRIT today announces that it has exercised its option to acquire (subject to certain conditions) the 70.01 per cent of BRIT Insurance (formerly Benfield Reinsurance Company) which it does not already own.
September 23, 1999

• The consideration for the Acquisition will include the issue of 30,479,798 New BRIT Shares. Upon completion of the Acquisition, Lennoxhurst (a company in which Benfield Greig owns the whole of the economic interest) and Benfield Greig will hold, in aggregate, 14.8 per cent of the Enlarged Group's share capital.
• BRIT Insurance has historically specialised in catastrophe excess of loss reinsurance underwriting. BRIT Insurance also has a small team highly experienced in the financial risks market.
• As at 31 December 1998, BRIT Insurance had net assets of some £60 million. In the year to 31 December 1998, BRIT Insurance made a pre-tax profit of £4.4 million.
• The Acquisition is conditional upon, inter alia, FSA approval, the New BRIT Shares being admitted to the Official List and approval of BRIT Shareholders at an extraordinary general meeting.
• Listing Particulars for BRIT and a shareholders' circular convening an extraordinary general meeting for 18 October 1999 will today be posted to BRIT Shareholders.

• The allotment to Lennonxhurst of 30,479,798 New BRIT Shares.
• The New BRIT Shares to be allotted pursuant to the Acquisition will be issued credited as fully paid and rank pari passu in all respects with the BRIT Shares in issue as at the date of completion of the Acquisition including the right to receive all dividends or distributions declared, paid or made after that date. However, as between BRIT and Lennoxhurst, Lennoxhurst has waived its entitlement to any dividend or distribution which is declared, paid or made on the New BRIT Shares issued to it pursuant to the BRIT Insurance Acquisition Agreement and for the time being owned by Lennoxhurst, in respect of all periods prior to completion of the Acquisition;
• Deferred consideration equal to one half of the aggregate of the balances on technical account for general business of BRIT Insurance for the period of six years from the date of the completion of the acquisition of the 29.99 per cent. of the shares in BRIT Insurance (16 December 1998) (less corporation tax at the prevailing rate). Losses on the technical account during that period will be deducted from any deferred consideration payable. Dividends or other distributions paid to Benfield Greig or Lennoxhurst during the period from 16 December 1998 to the date of the completion of the Acquisition plus dividends paid on the New BRIT Shares issued as consideration in respect of the six years from the completion of the Acquisition will be deducted from any deferred consideration which is payable as will any amount equal to the retained profits payment referred to below. BRIT is entitled to satisfy the deferred consideration by allotting new ordinary shares in BRIT or (at BRIT's election) by issuing loan notes to Lennoxhurst, or by a combination of the two; and
• A retained profits payment equal to 70.01 per cent. of the retained profit of BRIT Insurance for the period from 16 December 1998 to the date of completion of the Acquisition.