Koa Fire & Marine and Nippon Fire & Marine Sign Merger Agreement

The Koa Fire and Marine Insurance Co., Ltd. (Mutsuharu Okamoto, President) and The Nippon Fire and Marine Insurance Co., Ltd. (Ken Matsuzawa, President) signed a merger contract in accordance with a memorandum of the merger signed on March 23 and an addendum signed on July 28, after a resolution of the two companies' boards today. I. Highlights of merger The Koa Fire and Marine Insurance Co., Ltd. and The Nippon Fire and Marine Insurance Co., Ltd. have chosen to merge to take advantage of the opportunity for reform presented by the growing trend of liberalization and deregulation and other changes in the competitive environment. The merger will enable the two companies to take mutual advantage of their respective strengths and distinctive features, while at the same time creating a new comprehensive insurance group capable of offering high-quality insurance services based on the two companies' core non-life and life insurance services, thereby allowing the two to more readily meet the high expectations of customers and the markets. By pooling their product development skills to offer more attractive products and integrating and enhancing their service networks, the new entity will be able to further increase customer satisfaction and establish a powerful presence as the customer's choice in the insurance market. By increasing business efficiency and improving competitiveness through economies of scale, the merger will also enhance the profitability and financial foundations of the new entity and maximize shareholder value. II. Outline of merger contract 1. Method of merger Koa Fire & Marine and Nippon Fire & Marine will merge on equal terms. Legally, however, Nippon Fire & Marine will be the surviving entity and Koa Fire & Marine will be dissolved. 2. Date of merger April 1, 2001 3. Trade name The new company will be called Nipponkoa Songaihoken Kabushikigaisha, which will be written in English as NIPPONKOA Insurance Company, Limited .4. Location of head office 7-3, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo (the present location of the head office of Koa Fire & Marine) 5. Merger ratio One share in the merged entity will be allocated for each share held by shareholders of Koa Fire & Marine. 6. Paid-in capital to be increased Paid-in capital to be increased as a result of the merger will be ¥30,003,629,095. However, if any convertible bonds issued by Koa Fire & Marine are converted to shares between and including October 1, 2000 and the day preceding the merger, the amount incorporated in paid-in capital as a result of such conversion will be included. 7. General shareholders' meetings for approval of merger Extraordinary general shareholders' meetings will be held by Koa Fire & Marine and Nippon Fire & Marine respectively on December 20, 2000 to seek approval for the merger contract and other necessary matters relating to the merger. 8. Payment to be delivered due to merger Following the conclusion of a regular general shareholders' meeting of the new company scheduled for June 2001, the new company will without delay pay a merger payment of ¥7.5 per share in Koa Fire & Marine instead of the dividend for the period from April 1, 2000 to March 31, 2001. 9. Directors and auditors appointed upon merger The following directors and auditors of Koa Fire & Marine will be appointed as directors or auditors of the new company when the merger takes place: Directors Mutsuharu Okamoto (currently president & CEO) Masazumi Kaneko (currently executive vice-president) Shunji Oki (currently senior managing director) Masanori Miyata (currently managing director) Shoichiro Hamanaka (currently director) Yukio Takeda (currently director) Auditors Zenshiro Nakazawa (currently standing corporate auditor) Yasuhiko Ko (currently corporate auditor)