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• Worldwide new business sales increased by 18% to £6.1 billion(APE* up 25% to £1 billion)
• New regular premium sales up 37% to £0.5 billion
• Total single premium sales 17% higher at £5.6 billion
• Total UK new business sales increased by 24% to £3.7billion
• Worldwide retail investment sales up 21% to £0.8 billion

*APE (annual premium equivalent) is total new annual premiumsplus 10% of new single premiums.

Bob Scott, Group Chief Executive, commented:

"These are excellent figures from our United Kingdom andoverseas businesses with healthy increases in new business sincethe announcement of the merger between CGU and Norwich Union inFebruary. Our distribution power will increase throughbancassurance alliances in both the United Kingdom and Spain and webelieve that the financial strength of the group combined with ourexcellent long-term investment performance will increasingly makeour products attractive to investors and financial advisors."

Enquiries:

United Kingdom: The new business figures reflect acontinued strong performance since the merger was announced inFebruary 2000. We believe the financial strength of the combinedGroup has proved to be attractive to investors and that on-goingsupport from financial advisors has helped to push up sales in therun up to the summer months.

Total United Kingdom new business sales increased by 24% to £3.7billion in the first half of 2000 and in APE terms were 23% higherat £541 million. The long-term savings businesses of Norwich Unionand CGU now command an estimated UK market share of 10% giving aleading position in the life and pensions market place. CGNU is theleading provider to the IFA market and IFA business has grownstrongly in the first half of the year, increasing by 31% over thefirst six months of 1999 and also showing an 8% quarter on quarterimprovement in 2000. IFAs provide over 75% of CGNU’slong-term business in the United Kingdom.

New regular premiums increased by 21% to £193 million. Thecombined businesses have a market leading position in termassurance sales based on first quarter figures, supported by verystrong growth in the second quarter.

Bond and savings sales showed an impressive increase of 24% innew business single premiums to £1.7 billion. The significantsuccess of bond sales is attributed to the continued support byIFAs underpinned by the attractive product range in the currenteconomic climate.

Total individual pension sales increased by 31% to £559 millionand group pensions increased 59% to £357 million reflectingCGNU’s broad and competitive position and very proactivestance towards building market share in the run up to stakeholderpensions coming on stream in 2001. A major component of this ispooled managed pension funds, where improved investment returnshave been instrumental in attracting new business.

Sales of annuity products have increased by 5% to £420 million,reflecting continued growth in sales of with-profit annuities of£71 million (1999: £15 million), and our continued policy ofpricing conventional annuities for profit as well as volume.

Sales of our Cat-standard Isa range continue to be veryattractive to investors and have increased over 500%, reflectingthe investment made in this business.

Following the merger of CGU and Norwich Union, a singlemarketing group will be launched in October 2000 and, until thatdate, the two existing marketing groups will continue to operate asseparate units. The product range and branding announcements inrespect of the future single marketing group will be made in thelead up to the launch date. The new range will represent the bestbenefits and product features from both long-term savingsbusinesses.

Partnerships and strategic alliances with a range of otherleading UK brand names promote further growth opportunities asadditional distribution routes expand and open up. Alliances withleading United Kingdom brand names, The Royal Bank of Scotland andTesco, will further promote strong and innovative businessperformance within the life, pensions and investment arena.

Having stated its intention to be a major provider ofstakeholder pensions, CGNU became one of the first to launch a newpension product that meets the Government’s minimum standardsin the pre-stakeholder pension phase – Your Pension @ CGU,with other complimentary product initiatives to follow. The pensionoffers investors charge-free policies until April 2001 and freetransfers in, as well as a highly competitive charging structurefor April 2001 onwards, designed to encourage persistency andhigher investments. An associated development has been CGNU’se-commerce functionality for this product that brings on-linepension applications to the market place for the first time.

France: The combined French businesses produced excellentfigures, on the back of the performance established in the firstquarter with further strong growth in unit-linked products. Newsingle premiums, which dominate the market, increased by 49% to£968 million, ahead of overall market growth. AFER, the largestsavings organisation in France, increased sales of its bondproducts by 14% over the first six months of 1999. Sales of SFER,the unit-linked product of AFER, increased sales by 240% to £177million, continuing the trend established in the first quarter, toprovide 33% of total AFER sales.

Total sales of unit-linked and other savings products were morethan double the first six months of 1999, reflecting the trendtowards unit-linked products following strong equity performance in1999 and the low interest rate environment.

Ireland: The CGNU Irish business represents thecombination of Hibernian, CGU and Norwich Union Ireland andpositions us as one of the top five providers of new life andpensions business. The combined businesses produced a set ofexcellent figures continuing the performance reported in the firstquarter. New single premium sales, up 74% over first half 1999,include a £51 million contribution from Hibernian and reflect thecontinued success of the Norwich Union Celebration Bond and CGUbond products.

The increase in regular premium sales, up 170% over first half1999, principally reflects the impact of the Hibernian acquisitionearlier this year.

Netherlands: Delta Lloyds Nuts Ohra has a market share ofaround 6%, making it the third largest life and pensions insurer inthe Netherlands. Single premiums were up 33% at £203 million,reflecting the inclusion of £41 million from the acquisition ofNuts Ohra following good individual pensions sales. Regular grouppensions sales were up 12% although sales of individual lifeproducts were slower ahead of planned tax changes.

Poland: The Polish pensions business reported regularpremium sales of £109 million (1999: £2 million) in the first sixmonths of 2000. Of the reported regular premiums, £99 million(1999: £2 million) was contributed by the CGU business, the marketleader for private pensions, representing the processing of 507,000pensions cases. The regular premium sales reported by the NorwichUnion business of £10 million represented the processing of 65,000pension cases.

Further new pension customers have been won as they enter themarket, attracting 46,000 in our CGU business and 9,000 in ourNorwich Union business in the first six months of this year.

The combined Polish life operation comprises CU Polska, aleading life business, together with the Norwich Union lifebusiness launched in January 2000. CU Polska maintains its overallmarket position second only to PZU, the former state insurer. Thecombined business sales were lower than in the same period in 1999,reflecting the previous high level of activity in the pensions andlife market. Market share based on total premium income has beenmaintained at around 20%, including the £2 million regular premiumcontribution from the Norwich Union business. Long term growthprospects remain very good, with less than 20% of employed peoplehaving an individual life policy.

Spain: Our Spanish businesses returned a near 200%increase in single premium sales, reflecting the launch ofunit-linked life and savings products in the second half of 1999.On 19 May 2000 we announced a new bancassurance partnership withBancaja, Spain’s fourth largest savings bank, where we willacquire 50% of the share capital and control of Bancaja’slife insurance subsidiary, Aseval. The combined operations will bea top ten life and pensions provider in Spain, with exclusiveaccess to Bancaja’s distribution network of around 1,000branches. This transaction is subject to regulatory approval and weexpect a contribution to new business to commence in the secondhalf of this year.

Other Europe:
Italy: We continue to explore opportunities to build ourbancassurance distribution network. Our partnership with Bancadelle Marche, launched in September 1999, has continued to producestrong single premium sales of £36 million. Activity with ourbancassurance partner, Banco Popolare di Lodi, has by contrastfocussed on regular premium sales that increased by 200% to £3million. The reduction in Other Europe when compared to 1999principally reflects the cessation of our exclusive bancassuranceagreement with Credito Italiano last year.

Other businesses: The initial European version of Navigator,based upon the internet-enabled fund of funds service operated byour Australian business, boosted single premium sales by £20million. This business offers tax-efficient products to high networth individuals and operates out of Dublin.

Our business in Luxembourg has continued the strong performancereported in quarter one for sales of UCITS (collective investmentschemes), up 114%. Our German business has seen annual premiums up42% to £19 million and single premiums of £26 million. Goodprogress has also been made in our smaller businesses in Belgium,Czech Republic, Portugal and Turkey. In Turkey, we continue toprepare for the new opportunities presented by private pensionslegislation currently before parliament, and hope to be one of thefirst companies to be granted a pensions licence later this year.Annual premium sales were up by 64% to £12 million.

International: The result from International consistsprincipally of our businesses in Australia and North America. OurAustralian life and pensions business posted a 23% increase insingle premium business to £123 million and a 50% increase inregular premium business to £7 million. Our Australian unit trustbusiness reported an 18% increase to £166 million.

Our United States business reported sales of £94 million.

Total sales from the Norwich Union fund of funds Navigatorproduct in Australia increased to £376 million, an increase of 33%on 1999 levels, giving total funds under administration of £2.2billion.

On 14 June 2000 we announced the intention to sell our Canadianlife businesses, which contributed £7 million of regular and £19million of single premium sales.

Notes to Editors

• CGU and Norwich Union merged on 30 May 2000 to create CGNU plcthe UK's largest insurance group and one of the top-five lifeinsurers in Europe with substantial positions in other marketsaround the world making it the world’s 6th largest insurerbased on gross worldwide premiums.

  CGNU's principal business activities are long-term savings,fund management and general insurance with worldwide premiumincome and retail investment sales of £26 billion and assetsunder management of more than £200 billion.

  From October, the combined life and pensions, retail fundbusinesses and general insurance in the UK will operate under theNorwich Union brand, while the institutional investment businesswill operate under the Morley Fund Management brand.

• The worldwide new business figures presented are combined CGUand Norwich Union.
• New business figures have been translated at average exchangerates applying for the period.

• 	6 months to 30 June 2000	6 months to 30 June1999
  France -francs	£1 = 10.73	£1 =9.78
  Ireland -punts	£1 = 1.29	£1 =1.17
  Netherlands -guilders	£1 =3.60	£1 =3.29
  Poland -zloty	£1 =6.65	£1 =6.25
  Spain -pesetas	£1 =272.16	£1 =247.75

  • All growth rates are quoted in local currency.
  • Annual premium equivalent (APE) is an industry standard forcalculating life, pensions and investments new business levels.It is the total of new regular premiums plus 10% of singlepremiums.

  Annual premiumequivalent	6 months to 30 June2000	Local currencygrowth
  	£m
  UnitedKingdom
  IFA	422	28%
  Partnerships/Direct	119	8%
  	541	23%
  France	118	35%
  Ireland	45	116%
  Netherlands	52	4%
  Poland	132	308%
  Spain	9	6%
  OtherEurope	72	(44%)
  International	62	7%
  Total long-termsavings	1,031	25%

  
  

  	Single			Regular
  	6 months to 30 June2000	6 months to 30 June1999	Local currencygrowth	6 months to 30 June2000	6 months to 30 June1999	Local currencygrowth
  	£m	£m		£m	£m
  UnitedKingdom
  Individualpensions	479	360	33%	80	67	19%
  Grouppensions	312	193	62%	45	32	41%
  Mortgage	-	-	-	19	26	(27%)
  Annuities	420	401	5%	-	-	-
  Bonds andsavings	1,660	1,334	24%	3	3	-
  Otherlife	95	45	111%	35	23	52%
  PEPs/ISAs/unittrusts/OEICS	510	464	10%	11	8	38%
  	3,476	2,797	24%	193	159	21%
  France
  AFER (excludingunit-linked)	363	351	14%	-	-	-
  Unit-linked &other savings	540	288	106%	8	9	(3%)
  Protectionbusiness	65	76	(6%)	13	16	(6%)
  	968	715	49%	21	25	(5%)
  Ireland
  Life	164	112	61%	7	3	140%
  Pensions &annuities	34	13	177%	18	7	184%
  	198	125	74%	25	10	170%
  Netherlands
  Individualpensions	116	41	210%	-	-	-
  Grouppensions	50	88	(39%)	9	9	12%
  Life	37	38	9%	23	29	(15%)
  	203	167	33%	32	38	(8%)
  Poland
  Life &savings	5	6	(8%)	22	32	(27%)
  Pensions	-	-	-	109	2	5,699%
  	5	6	(8%)	131	34	312%
  Spain
  Life &savings	32	9	294%	4	4	28%
  Pensions	5	5	13%	1	4	(79%)
  	37	14	197%	5	8	(29%)
  OtherEurope
  Life &pensions	183	693	(71%)	42	64	(28%)
  UCITS andother	121	57	114%	-	-	-
  	304	750	(56%)	42	64	(28%)
  International
  Life &pensions	228	223	2%	23	22	5%
  Unittrusts	166	144	18%	-	-	-
  	394	367	8%	23	22	5%
  Total long-term savings	5,585	4,941	17%	472	360	37%
  Analysis of UK long-term savings sales bydistribution channel
  IFA
  - life and pensions products	2,419	1,776	36%	138	116	19%
  - investment products	360	333	8%	6	2	200%
  Partnerships/Direct
  - life and pensions products	547	557	(2%)	44	35	26%
  - investment products	150	131	15%	5	6	(17%)
  Total UK long-term savings	3,476	2,797	24%	193	159	21%