August 6th,2002 Mitsui Sumitomo Insurance strengthens capital base of reinsurance subsidiary units and launches new plans to expand global reinsurance operations We, Mitsui Sumitomo Insurance Company Limited, Tokyo, Japan (President & CEO: Hiroyuki Uemura), are pleased to hereby announce our new business plans to execute our global reinsurance strategies utilizing our two subsidiaries, MS Frontier Reinsurance Ltd. (based in Hamilton, Bermuda) and Mitsui Sumitomo Reinsurance Ltd. (based in Dublin, Ireland). Mitsui Sumitomo Insurance, a member of both the prominent Mitsui and Sumitomo group of companies in Japan, has over 14,000 employees worldwide and is one of the largest non-life insurers in Japan. Our company's paid-up capital at the end of fiscal year 2001 was JPY 128.5 billion (approx. US$ 988 million) and our shareholder's equity (net assets) was JPY 1,262.5 billion (approx. US$ 9,712 million). After undergoing many years of a severely soft market since 1993, the re/insurance market has suffered large catastrophe losses in 1999 followed by the horrific WTC event in 2001 and is now showing extremely strong signs of hardening throughout all lines of business. Prices have sharply increased, terms and conditions have been tightened, and an unprecedented level of strictness has been applied to guidelines that decides where capacity (risk capital) could be deployed. In view of this sharp turn in the market which has presented many new challenges as well as new business opportunities, we have hereby decided to broaden and secure various business options for the future by executing flexible, prompt, and timely reinsurance strategies. Our core objective will be to consolidate our reinsurance strategies for both domestic and international risks, as well as for outwards and inwards reinsurance, and maximize the positive effect on our overall earnings and capital efficiency. Our two subsidiary units will play a vital role in achieving this business mission. MS Frontier Re, incorporated in September 1997, has increased its capital base from US$ 10 million to US$ 100 million, and has also newly received an insurer's financial strength rating of AA- from Standard & Poor's. Through prudent underwriting based on catastrophe modeling assessments, MS Frontier Re will write overseas property catastrophe reinsurance and execute various swap deals in order to establish geographical portfolio optimization and risk diversification for the Mitsui Sumitomo Insurance Group, whose cat risk portfolio is currently Japan intensified. In It effect, it will function as a strategic vehicle adjusting our Group's risk/profit structure. Mitsui Sumitomo Re, incorporated in February 1999, has received a AA- rating from Standard & Poor's , and has been mainly writing non-catastrophe property & casualty reinsurance in Asia and Europe. In view of the significantly increasing business opportunities in the hardening market, we have increased Mitsui Sumitomo Re's capital from EUR 20 million to EUR 40 million in order to proactively write more business, and achieve solid growth in revenue and profits. It will also assume various non-catastrophe reinsurance programmes of our Group's overseas insurance subsidiaries in order to maximize the efficiency of our Group's reinsurance arrangements. We have always focused on managing and financing our retained risks through sufficient reinsurance arrangements. This is vital for us to adequately meet the diversified and various insurance needs of our clients where there is a growing increase in values and concentration of risks, and also in order to protect our balance sheet from large natural catastrophe losses such as earthquakes and windstorms. Although the concept of stabilizing our profits and maximizing our capital efficiency through such reinsurance arrangements will remain unchanged, we are also keen to recognize that there is an increasing demand for alternative solutions other than just buying reinsurance when taking into consideration the highly volatile prices and conditions of the open market,Besides ceding out our domestic risks (which make up the core of our company's profit base), we will also take advantage of our strong security rating to assume selected overseas risks to increase our earnings and cover the increased cost of capital, ultimately maximizing our capital efficiency as a result of the properly re-shuffled and adjusted structure of our overall risk portfolio. In addition, we also plan for the subsidiaries to act as an information base that will gather and analyze various technical know-how regarding advanced risk finance & capital management methods used in today's market. Together, they will pool and utilize such knowledge and act as a group retention vehicle and assume programmes of our Group, while also providing comprehensive risk analysis and programme-structuring consulting services to our overseas insurance subsidiaries. We are certain our comprehensive reinsurance strategies will drive us to achieve our goal to solidly increase our company value and maximize the return on our capital. MS Frontier Re and Mitsui Sumitomo Re are positioned as two of the most strategically important units within the Mitsui Sumitomo Insurance Group. Through in-depth expertise, a strong worldwide network, and a highly respected history of client commitment under a globally known brand-name, we are positioning ourselves to provide an even more sufficient service for our clients. End