Offer for capacity - Part 2

Amlin PLC
02 August 2002

PART 2

For immediate release:      2 August 2002
                            

Not for release, publication or distribution in or into the United States,
Canada, Japan or Australia or any Prohibited or Excluded Territory.

PRESS RELEASE

Recommended Offer by Amlin plc on behalf of Amlin Corporate Member Limited to
acquire all of the outstanding Capacity on Syndicate 2001 not already owned by
the Group

Introduction

Amlin plc is making an offer on behalf of ACM, a wholly-owned subsidiary of
Amlin, to acquire the outstanding Capacity on Syndicate 2001 not already owned
by the Group for the 2003 and each subsequent year of account. The Capacity
Offer, which is an unlimited offer, comprises a Share Offer and a Cash
Alternative with, in each case, a retention of the right to participate on
Syndicate 2001 for the 2003 year of account only to a limited extent.

KPMG Corporate Finance is acting as Lloyd's Sponsor, as required by the Capacity
Offer Rules, for the Capacity Offer. The Capacity Offer is conditional upon,
inter alia, the approval of Amlin Shareholders which will be sought at the
Extraordinary General Meeting of Amlin to be held at 3.00 pm on 21 August 2002
and receipt of valid acceptances in respect of at least 64 per cent. of the
Relevant Capacity. However, if such level of acceptances is not reached, Amlin
reserves the right to declare the Capacity Offer unconditional in all respects
and to proceed to accept transfers of that Capacity which have been validly
tendered by Members.

Background to and reasons for the Capacity Offer

The Directors believe that there is a strong strategic and commercial rationale
for increasing Amlin's ownership of Syndicate 2001's capacity beyond the current
level of 72.3 per cent. and, if possible, to 100 per cent.  The Directors also
believe that the benefits of owning 100 per cent. of Syndicate 2001 include:

•  a group structure which is not affected by the presence of third
party participants who may organise their underwriting activities on an annual
basis;

•  the ability to manage the Group's underwriting and investments on a
longer term basis, which the Directors believe may help increase returns;

•  greater flexibility in developing and implementing the Group's
strategy;

•  the potential to adjust more easily the premium income limit of
Syndicate 2001 during the course of a year of account if the Directors believe
it is beneficial so to do; and

•  further opportunities to streamline operations.

To position the Group to be able to acquire and support the underwriting of
additional Capacity on Syndicate 2001, the Company raised approximately £80
million through the issue of additional equity capital in July 2002 and has been
in discussion with banks and other providers of debt and letter of credit
finance to support underwriting on Syndicate 2001 of up to approximately £900
million for the 2003 year of account.  In tandem with this, the Company has
conducted negotiations with members' agents who act on behalf of Members on
Syndicate 2001, who have undertaken to recommend the Capacity Offer to their
Members in respect of all of their Capacity, which totals £200.9 million and
represents 90.6 per cent. of the outstanding Capacity on Syndicate 2001 not
already owned by the Group.



The principal terms of the Capacity Offer

Upon and subject to the terms and conditions set out in the Capacity Offer
Document, Amlin is offering, on behalf of ACM, to acquire all of the capacity on
Syndicate 2001 for the 2003 and each subsequent year of account that the Group
does not already own (being approximately £221.7 million) on the following
basis:

For each £1 of Capacity currently  For UK Members only:
held

                                   (i)          0.2558 New Amlin Shares1 together with the retention of
                                   the right to participate on Syndicate 2001 for the 2003 year of account
                                   only with the equivalent of a premium income limit of 50p; or

                                   (ii)         20p in cash together with the retention of the right to
                                   participate on Syndicate 2001 for the 2003 year of account only with
                                   the equivalent of a premium income limit of 50p; or

                                   (iii)            a combination of (i) and (ii).

                                   For non UK Members (other than those resident or domiciled in the
                                   Prohibited Territory or any of the Excluded Territories):

                                   20p in cash together with the retention of the right to participate on
                                   Syndicate 2001 for the 2003 year of account only with the equivalent of
                                   a premium income limit of 50p.

Note

1 Equivalent to approximately 22p per £1 of Capacity currently held based on the
closing middle market price of an Amlin Share on 31 July 2002, the latest
practicable date prior to the publication of this announcement.

Subject to the Capacity Offer becoming or being declared unconditional in all
respects, AUL will increase Syndicate 2001's capacity for the 2003 year of
account to £1 billion and will offer Members pre-emption in respect of their
then current premium income limit on Syndicate 2001 for the 2003 year of
account. The equivalent of a premium income limit of 50p for each £1 of Capacity
currently held pursuant to the Limited Tenancy Arrangements will accordingly be
increased to 62.5p for the 2003 year of account.  AUL has agreed to waive its
right to receive profit commission in respect of the Limited Tenancy Capacity
for the 2003 year of account.

The Capacity Offer will not be extended beyond 16 September 2002 and will close
before any pre-emption offer is made to Members to increase their respective
premium income limits in respect of Syndicate 2001 for the 2003 year of account.
Accordingly, the Capacity Offer relates to a Member's current level of capacity
on Syndicate 2001 prior to any such pre-emption.

Following the closure of the Capacity Offer, if the Group then holds or has
contracted to acquire at least 64 per cent. of the Relevant Capacity (and,
therefore, holds or has contracted to acquire at least 90 per cent. of the total
Capacity of Syndicate 2001), it intends to make an application to effect a
minority buy-out.  If such an application is successful, Members whose Capacity
is acquired pursuant to the minority buy-out will receive the same consideration
as if they had originally accepted the Capacity Offer.

Based on a price of 86.0p per Amlin Share (being the closing middle market price
per Amlin Share on 31 July 2002 the latest practicable date prior to the
publication of the Capacity Offer Document) and assuming that all Members accept
the Share Offer in full, the aggregate value of the share element of the Share
Offer will be approximately £48.8 million, and up to 56,708,346 New Amlin Shares
will be issued under the Share Offer, equivalent to approximately 13.2 per cent.
of the issued share capital of Amlin as enlarged by the Share Offer.  Assuming
all Members elect for the Cash Alternative in full, the aggregate value of the
cash element of the Cash Alternative will be approximately £44.3 million.

Any New Amlin Shares to be issued pursuant to the Share Offer will be credited
as fully paid and will rank pari passu in all respects with the existing Amlin
Shares, including the right to receive all future dividends and other
distributions declared, paid or made in respect of Amlin Shares from the date of
issue.  Other than under the Share Offer, the New Amlin Shares are not being
made available in whole or in part to the public.

Application has been made to the UK Listing Authority and to the London Stock
Exchange for up to 56,708,346 New Amlin Shares to be admitted to the Official
List and to trading on the London Stock Exchange's market for listed securities.
  It is expected that Admission will become effective and that dealings for
normal settlement will commence on 2 September 2002.

Undertakings and recommendations to accept the Capacity Offer

Members' Agents

Rothschild has advised certain members' agents (being Anton Private Capital
Limited, CBS Private Capital Limited, Hampden Agencies Limited and SOC Private
Capital Limited) that the overall value of the Capacity Offer, taking into
account the Limited Tenancy Arrangements, is fair and reasonable.  In providing
its advice, Rothschild has relied on such members' agents commercial assessment
of the Capacity Offer.

Amlin has received from such members' agents undertakings to recommend the
Capacity Offer to their Members (subject to those Members taking into account
their own individual circumstances)  in respect of all of their Capacity
totalling £200.9 million, representing 90.6 per cent. of the outstanding
Capacity not already owned by the Group.

In respect of such Capacity, Amlin has also received from such members' agents
irrevocable undertakings to accept the Capacity Offer on behalf of MAPA Members
in respect of their MAPA Capacity Entitlements totalling £69.8 million,
representing 31.5 per cent. of the outstanding Capacity not already owned by the
Group (subject to individual MAPA Members indicating to the contrary to their
members' agents).

Corporate Members

Amlin has received from Corporate Members irrevocable undertakings to accept the
Capacity Offer in respect of Capacity totalling £14.2 million, representing 6.4
per cent. of the outstanding Capacity not already owned by the Group.

Directors and divisional underwriters

The Directors of Amlin, ACM and AUL and the divisional underwriters of Syndicate
2001 who have participations on Syndicate 2001 have irrevocably undertaken to
accept the Capacity Offer in respect of all of their Capacity totalling in
aggregate £0.8 million, representing 0.4 per cent. of the outstanding Capacity
not already owned by the Group.

Therefore, in aggregate, Amlin has received (subject to individual MAPA Members
indicating to the contrary to their members' agents) irrevocable undertakings
for the Capacity Offer from or on behalf of Members in respect of Capacity
totalling £84.8 million, representing 38.2 per cent. of the outstanding Capacity
not already owned by the Group.

2003 year of account

Amlin has recently indicated, in accordance with Lloyd's requirements, that
Syndicate 2001 intends to set its capacity for the 2003 year of account at an
amount up to £1 billion.  The Directors believe that Syndicate 2001's premium
income for the 2003 year of account could exceed its capacity by up to
approximately £100 million. Amlin intends to accommodate such additional premium
income by quota share reinsurance facilities. Syndicate 2001 already has in
place two quota share reinsurance facilities with XL Re and Montpelier Re which
enable it to underwrite premium income of up to £100 million for the 2002 and
2003 years of account.

The Directors believe, on the basis that there is no material change to Lloyd's
risk-based capital requirements, that Amlin will be able to support underwriting
on Syndicate 2001 for the 2003 year of account of up to £862 million with its
existing equity capital base and letter of credit facilities together with
additional debt (including letters of credit) of up to £43.2 million.  This
assumes that the Capacity Offer is taken up in full and Members underwrite £138
million, being the whole of their Limited Tenancy Capacity.  To the extent that
the additional debt cannot be procured, Amlin will reduce its support for the
underwriting capacity of Syndicate 2001 for the 2003 year of account by a
proportionate amount.

The Limited Tenancy Arrangements would permit Members to continue to underwrite
on Syndicate 2001 for the 2003 year of account only to a limited extent.  The
Group would charge such Members a fee equivalent to 0.6 per cent. of their
Limited Tenancy Capacity for the 2003 year of account but would waive its right
to any profit commission on profits earned in respect of such Limited Tenancy
Capacity.

The final level of capacity on Syndicate 2001 that Amlin will be able to support
in the 2003 year of account will depend on the level of ownership of Syndicate
2001 achieved by Amlin following the closing of the Capacity Offer, Lloyd's
risk-based capital requirements, the extent to which eligible Members elect for
the Share Offer and the extent to which Amlin is able to procure additional debt
facilities.

Current trading and outlook

The current year continues to benefit from rate increases across most classes of
business, which were gathering momentum prior to 11 September 2001 and which
have accelerated significantly since then.  In addition, profits will accrue in
2002 from profitable business which was written by the Group in 2001.  In light
of this, the Directors consider that underlying underwriting conditions for the
current financial year are showing a material improvement over the previous
year.

The Directors believe such favourable underwriting conditions will continue for
the remainder of 2002 and into 2003.  Assuming the continuance of such
favourable underwriting conditions, the Directors believe that the Group's
prospects would be enhanced by the acquisition of Capacity on Syndicate 2001
that it does not already own and that the value to the Group of acquiring such
Capacity justifies the consideration payable under the Capacity Offer.

Amlin's share of Syndicate 2001's estimated losses from the terrorist attacks of
11 September 2001 has increased by approximately £4.7 million before tax from
the last published estimate made on 11 June 2002.

Dividends

The Directors announced at the time of Amlin's rights issue in 2001 that, in
view of the scale of the losses from the 11 September 2001 attacks and the
underwriting opportunities currently existing, Amlin would not pay a dividend in
respect of the 2001 financial year. The Directors believed that it was in the
best interests of Shareholders for the Company to retain funds in order to
assist the growth of the Group's underwriting. However, in the absence of any
other extraordinary losses, the Directors expect to resume interim and final
dividend payments in respect of the 2002 financial year.

Information on Amlin and Syndicate 2001

Amlin is the largest independent business operating in the Lloyd's market
(measured by owned and managed premium income for the 2002 year of account).

Amlin operates through Syndicate 2001, which has a premium income limit for the
2002 year of account of £800 million. This has been supplemented by quota share
reinsurance facilities which allow Syndicate 2001 to underwrite up to a further
£100 million of premium income. Over the past three years, Amlin has focused its
activities on Syndicate 2001, divesting non-core interests, such as it Lloyd's
members' agencies and its interests in Lloyd's third party syndicates. Amlin has
successfully grown its ownership of Syndicate 2001's capacity to 72.3 per cent.
for the 2002 year of account, compared with 38.0 per cent. for the 1999 year of
account. Syndicate 2001 has a diversified book of insurance business.  The
mid-point forecast of the range of results for the 2000 and 2001 years of
account on Syndicate 2001, as reported in the published quarterly managed
syndicates forecast to 31 March 2002, was a loss of 1.5 per cent. and a loss of
4.5 per cent. on capacity of £423 million and £575 million respectively.

Notice of Extraordinary General Meeting

Due to the size of the Capacity Offer, it is conditional upon the approval of
Shareholders. The Extraordinary General Meeting will be held at 3.00 p.m. on 21
August 2002 at Amlin's offices at St Helen's, 1 Undershaft, London, EC3A 8ND.

Conclusion

The Directors have received financial advice in relation to the Capacity Offer
from KPMG Corporate Finance. On the basis of this financial advice and the
Directors' commercial assessment of the Capacity Offer (upon which KPMG
Corporate Finance has relied in giving its financial advice), the Directors
consider the terms of the Capacity Offer to be fair and reasonable so far as
Amlin's shareholders as a whole and the Company are concerned.

Recommendation

The Directors consider the proposed Capacity Offer and the resolutions to be
proposed at the Extraordinary General Meeting to be in the best interests of
Amlin and its shareholders as a whole.

Accordingly, the Directors unanimously recommend that shareholders vote in
favour of the resolutions to be proposed at the Extraordinary General Meeting,
as they intend to do, or procure, in respect of their own beneficial holdings
which comprise a total of 2,889,899 Amlin Shares, representing approximately 0.8
per cent. of Amlin's current issued share capital.

Enquiries:

For further information contact:

Amlin plc

Charles Philipps            Group Chief Executive        Tel: [phone]

Richard Hextall             Group Finance Director       Tel: [phone]

KPMG Corporate Finance

Richard Barlow              Director                     Tel:  [phone]

Haggie Financial


David Haggie                                             Tel: [phone]

The contents of this announcement have been approved by KPMG Corporate Finance
of 8 Salisbury Square, London EC4Y 8BB for the purpose of section 21 of the
Financial Services and Markets Act 2000.

KPMG Corporate Finance, a division of KPMG LLP which is authorised by the
Financial Services Authority for investment business activities, is acting as
Lloyd's Sponsor and as financial adviser to Amlin in relation to the Capacity
Offer and is not acting for anyone else in relation to such Capacity Offer.
KPMG Corporate Finance will not be responsible to anyone other than ACM or Amlin
for providing the protections afforded to its clients or for providing advice in
relation to the Capacity Offer.

Rothschild, which is authorised by the Financial Services Authority for
investment banking activities, is acting as financial adviser to those members'
agents named in this announcement in relation to the Capacity Offer.  Rothschild
will not be responsible to anyone other than those members agents which it has
advised for providing the protections afforded to its clients or for providing
advice in relation to the Capacity Offer.

The Share Offer, which forms part of the Capacity Offer, is not being made
available to Members who are resident or domiciled outside the United Kingdom or
who are US persons. Such Members (other than Members resident or domiciled in
the Prohibited Territory or in any of the Excluded Territories) may only accept
the Cash Alternative. Neither the Share Offer nor the Cash Alternative is being
made available to Members resident or domiciled in the Prohibited Territory or
in any of the Excluded Territories.

This announcement does not constitute a solicitation, invitation or offer to
persons in the United States or any other jurisdiction where a solicitation,
invitation or offer could be contrary to law.  Accordingly, this announcement is
not being, and must not be, mailed or otherwise distributed or sent in, into or
from the United States, (whether by use of the mails or by any means or
instrumentality of interstate or foreign commerce), Canada, Japan or Australia
or the Prohibited Territory or Excluded Territories and persons receiving this
announcement (including custodians, nominees and trustees) must not distribute
or send it in, into or from the United States, Canada, Japan or Australia or the
Prohibited Territory or Excluded Territories.

This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities. The securities which may be issued pursuant to the
terms of the Capacity Offer may be illiquid and there may not be a market for
them. The value of securities may go down as well as up.  The Capacity Offer
Document in expected to be issued on 2 August 2002.

Terms as defined in the Capacity Offer Document shall have the same meaning in
this announcement.

AUL, the managing agent of Syndicate 2001, is interested in the Capacity Offer.

Any person considering accepting this Capacity Offer should read carefully the
Capacity Offer Document relating to the Capacity Offer and the risk factors set
out therein.

This announcement has been prepared in accordance with Lloyd's requirements.
Amlin has confirmed to Lloyd's that this announcement complies with the Capacity
Offer Rules.  This announcement has not been approved by Lloyd's.




Definitions

The following definitions apply throughout this announcement unless the context
requires otherwise:

'Accepting Member'           A person who is eligible to accept and who accepts the Capacity Offer in
                             accordance with the terms and conditions thereof.

'ACM'                        Amlin Corporate Member Limited

'Amlin'                      Amlin plc

'Amlin Shares'               ordinary shares of 25 pence each in the capital of Amlin

'AUL'                        Amlin Underwriting Limited

'Capacity'                   a Member's allocated capacity on Syndicate 2001 for the 2003 year of account
                             and each subsequent year or account

'Capacity Auction'           an auction within the meaning of paragraph 1 of the Auction Byelaw (No. 14 of
                             1997)

'Capacity Offer'             the offer to acquire Capacity on Syndicate 2001 on and subject to the terms
                             and conditions set out in the Capacity Offer document


'Capacity Offer Document'    The document setting out the Capacity Offer.
                             

'Cash Alternative'           an alternative form of consideration available in respect of the Capacity
                             Offer comprising cash and the retention of the right to participate on
                             Syndicate 2001 for the 2003 year of account only to a limited extent as set
                             out in the Capacity Offer document


'Council'
                             The Council of Lloyd's and any person or delegate acting under its authority,
                             including the Lloyd's Market Board and the Lloyd's   Regulatory Board.


'Excluded Territories'       Andorra, the Bahamas, Belize, Bermuda, the Cayman Islands, Czech Republic,
                             Greece, Italy, Jersey, Luxembourg, Malaysia, Malta, Norway, Portugal, Spain,
                             Taiwan, Trinidad and Tobago and 'Excluded Territory' means any one of them



'Group'                      the Company and its subsidiary undertakings


'Limited Tenancy             the retention of the right to participate on Syndicate 2001 for the 2003 year
Arrangements'                of account only, the waiver of the profit commission payable in respect of
                             the Limited Tenancy Capacity by AUL and the arrangements effecting the
                             Variations pursuant to the Capacity Offer, set out in the Capacity Offer
                             document


'Limited Tenancy Capacity'
                             participation on Syndicate 2001 for the 2003 year of account pursuant to the
                             Limited Tenancy Arrangements

'MAPA'                       a Members' Agents pooling arrangement  within paragraph 10(2) of the Agency
                             Agreements Byelaw

'MAPA Capacity Entitlement'  in relation to a MAPA Operator in respect of Syndicate 2001, an amount equal
                             to the sum of the MAPA participations on Syndicate 2001 of the MAPA Members

'Member'                     a member of Syndicate 2001 for the 2002 year of account including, where the
                             context requires, a Bespoke Member, a MAPA member, a Corporate Member and a
                             Deceased Member

'Minority buy-out'           an offer pursuant to the major Syndicate Transactions Byelaw (No 18 of 1997)

'New Amlin Shares'           new Amlin shares to be issued in connection with the Share Offer

'Prohibited Territory'       Singapore

'Prospectus'                 the prospectus dated 2 August 2002 relating to Amlin and the New Amlin Shares


'Relevant Capacity'          the aggregate syndicate allocated Capacity of Syndicate 2001 for the 2003
                             year of account held by Members (excluding Capacity allocated to Members
                             resident or domiciled in the Prohibited Territory) to which the Capacity
                             Offer relates

'Rothschild'                 N M Rothschild & Sons Limited

'Share Offer'                the offer by Amlin, on behalf of ACM, to UK Members only, to acquire Capacity
                             on Syndicate 2001 for New Amlin Shares and the retention of the right to
                             participate on Syndicate 2001 for the 2003 year of account only as set out in
                             the Capacity Offer document

                            
'US person'                  has the meaning given in Regulations under the US Securities Act of 1933


'UK Member'                  a Member resident and domiciled in the United Kingdom and who is not a US
                             person as at the date of this document and as at the date on which the
                             Capacity Offer closes


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