November 18th, 2004   Mitsui Sumitomo Insurance strengthens capital base of reinsurance subsidiary units and further expands global reinsurance operations We, Mitsui Sumitomo Insurance Company Limited, Tokyo, Japan (President & CEO: Hiroyuki Uemura), are pleased to hereby announce our plans to further propel the global reinsurance operations through our two subsidiaries, MS Frontier Reinsurance Ltd. (based in Hamilton, Bermuda) and Mitsui Sumitomo Reinsurance Ltd. (based in Dublin, Ireland).   After experiencing several years of hardening following the horrific WTC event in 2001, the reinsurance market had been perceived to be shifting gradually to a softer cycle as a consequence of capital inflow and relatively over-supplied capacity in the market. However, following the recent hurricanes in Florida and record-making typhoon landfalls in Japan, together with the withdrawal of certain well-known reinsurers, there would seem to be encouraging signs that the market is continuing to maintain its relatively hard condition. In view of this turn in the market, we decided to further strengthen our reinsurance subsidiaries' capital base to react in a more flexible, prompt, and timely manner.   MS Frontier Re, located in Hamilton, Bermuda, carries an insurer's financial strength rating of AA- of Standard & Poor's. MS Frontier Re further strengthens its financial position by increasing its capital from US$ 100 million to US$ 200 million, and accelerates its growth in revenue and profit. Through prudent underwriting based on catastrophe modeling assessments, MS Frontier Re writes property catastrophe reinsurance worldwide in order to establish geographical portfolio optimization and risk diversification for the Mitsui Sumitomo Insurance Group.   Mitsui Sumitomo Re, based in Dublin, Ireland, also carries a AA- rating of Standard & Poor's, and has been quite successful by mainly writing regional non-catastrophe short-tail reinsurance in Asian and European markets. Mitsui Sumitomo Re increases its capital from EUR 40 million to EUR 80 million and further enhances its solid growth and business expansion.   As a primary insurance provider, we have always focused on managing our portfolio through efficient and stable outward reinsurance arrangements. This is vital for us to adequately meet the diversified and various insurance needs of our clients, and also to protect our balance sheet from large natural catastrophe losses such as earthquakes and windstorms. While the hard market pressurizes our profit as a reinsurance purchaser, it will be a good opportunity for our reinsurance vehicles to augment their earnings, and thus eventually enable us to ride out the price volatility of the reinsurance market and stabilize our profit on a consolidated basis.   Along with our domestic operations (which currently make up the core of our Group's profit base) and vigorous expansion of overseas primary insurance operation through M&A and strategic alliances, we will further enhance our overseas reinsurance activities by taking advantage of our strong security rating. We are certain this comprehensive strategy will drive us to achieve well-balanced earnings structure, and ultimately maximize our capital efficiency by establishing an optimal portfolio on a consolidated basis   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