May 31,2000 Update on Preparations for the Merger of Sumitomo Marine and Mitsui Marine The Sumitomo Marine and Fire Insurance Co., Ltd. Mitsui Marine and Fire Insurance Co., Ltd. With an eye on the upcoming merger in October 2001, The Sumitomo Marine and Fire Insurance Co., Ltd. (Hiroyuki Uemura, President) and Mitsui Marine and Fire Insurance Co., Ltd.(Takeo Inokuchi, President and CEO) have made an early start in conducting joint businesses and are energetically making preparations as below, provided, however, that any act and thing to implement any item listed below shall bepreformed only to the extent that the compliance with any and all applicable laws hasbeen ensured, in particular the requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other U.S. antitrust laws and regulations. I. Extensive Study of Systems Integration 1. Key Components of Systems Integration Study (1) IT Integration Committee An IT Integration Committee has been set up to oversee the planning, design and execution of company-wide systems, from the pre-merger stage through to the final integration of our two firms. Owing to the study in the committee, we are now confident in building up the most efficient IT systems with reasonable investments leading up to the merger, and have been able to conduct a consistent and unified study into the implementation of seamless, speedy IT systems. Under the IT Integration Committee, we have set up about 40 subcommittees which are now actively carrying out this extensive study. These include subcommittees for developing an integrated client data base, an agency network system, and call center. Each is a key element of our new IT strategy and will be closely studied in tandem with the ongoing integration of our existing systems. (2) Joint Development Center for IT Systems In order to centralize the development of such integrated systems, we have opened a joint development center in Chiyoda-ku in Tokyo. From June, a total of about 100 personnel from both companies will be relocated here to begin tackling our new systems development activities. 2. Key Directions in Our Systems Integration Study With regard to post-merger computer systems, we have agreed on the following key directions and are now conducting in-depth analyses into each of them. (1) To maximize the effectiveness of our host computers and fully realize the synergy of existing system resources, we will continue to utilize the systems already in place in both our companies. However, by the second year after our merger, all systems in both companies will be integrated with Mitsui Marine host computers and connected using hub servers as part of the foundation for a 24-hour, 365-day open operating system. (2) We are building internet support functions into the information networks of both firms, utilizing large-capacity ATM lines. Our networks will integrate a wide range of communications, including e-mail, internal phone calls, host online businesses, and host-computer communications. Moreover, the intranet system will deliver integrated contents to both our firms using Sumitomo Marine's SKY Net. (3) For the agency network, we will build new expanded-function systems by integrating Agent 21 System, now under development by Mitsui Marine, and Sumitomo Marine's SKY Net. II. Integration of Subsidiaries and Affiliates 1. Early Integration of Investment Management Subsidiaries In advance of the actual integration of the two mother companies, we aim to integrate by April 2001 two wholly-owned subsidiaries, Sumitomo Marine Asset Management Co., Ltd. and Mitsui Marine Asset Management Co., Ltd., which will focus on the strategic development of financial services businesses, including mutual funds management and investment advisory services. The new subsidiary is expected to be a top performer in managing the assets of their mother insurance companies while also strengthening our capabilities in the area of asset management, including the management of mutual funds and pension plans. Economy of scale generated from managing assets of nearly Yen 3 trillion, together with the combined high quality and expertise of our two companies in fund management, are expected to help enhance our presence in this market. 2. Early Integration of Long-term Care Service Affiliates Pending shareholder approval, three affiliated companies will be integrated in March 2000: Sumitomo Marine Sawayaka Net, Co., Ltd., Mitsui Marine's affiliate, Life Service Network Co., Ltd., and Well Life Service, Co., Ltd. The consolidation of these operations is intended to expand service to policy holders and also reinforce our position in long-term care services, which are projected to be a major high-growth industry. 3. In addition to the above mentioned subsidiaries, our life insurance and other subsidiaries will start conducting joint businesses as soon as possible to realize increased synergy in all areas. Plans call for the full integration of these subsidiaries in October 2001 to coincide with the scheduled merger of the mother companies. III. Personnel Exchange (About 200 Employees) In advance of the actual integration, our mutual personnel exchange process willbegin in June. This first-phase exchange will involve 200 employees from all divisions at both head offices, including systems division staff and other personnel, to help accelerate joint development efforts and facilitate effective utilization of our shared business expertise. While closely monitoring the outcome of this first phase of our personnel exchange, we will continue with plans for all-out personnel exchanges between our two firms in the future, with a view to accelerating the consolidation of our operations, promoting mutual understanding and implementing smooth and speedy integration. IV. Joint Research and Development of Insurance Products Our two firms have collaborated in setting up an office space in Chuo-ku in Tokyo where we have started joint research and development activities. Our objective is to jointly develop new products and to reorganize and consolidate existing products and regulations. (Development of life insurance products began in April, and non-life insurance products in May.) V. Reciprocal Use of Claims Survey Subsidiaries Reciprocal use of our two firms' claims survey subsidiaries, The Sumitomo Kaijyo Claims Services(Motor) Co., Ltd. and Mitsui Kaijyo Motor Claims Adjusters & Co., Ltd. began in May in the Tohoku and Kyushu regions. Plans also call for reciprocal use of these subsidiaries nationwide in the months ahead. Our respective accident-support networks will be mutually extended as a result, which will in turn enable us to conduct speedier investigations into traffic accidents and provide faster and more efficient claims services. VI. Business Tie-Ups Overseas Starting in May, Sumitomo Marine has changed its business partner in Vietnam to the United Insurance Company of Vietnam (UIC), a local affiliated company of Mitsui Marine. Owing to this tie-up, Sumitomo Marine's local underwriting presence has been strengthened and the improvement of local services is expected to lead to further expansion of our client base. Moreover, owing to the transfer of Sumitomo Marine's subscribers, premium income in UIC is expected to increase and contribute to higher profits. VII. Joint Sales of Mutual Funds It has been agreed that mutual funds set up by Sumitomo Marine Asset Management Co., Ltd. and Mitsui Marine Asset Management Co., Ltd. will be distributed by their mother companies' agents which are allowed to sell mutual funds. Also, training programs for agents aimed at the examination of a registered representative agents will be jointly operated by both firms to help boost our efficiency and competitive edge.