SA Fire House Limited (Incorporated in the Republic of South Africa) Registration number 1957/003350/06. ( SA Fire House )

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1 Zurich Insurance Company South Africa Limited (Incorporated in the Republic of South Africa) Registration number 1965/006764/06 ISIN: ZAE JSE Code: ZSA ( Zurich or the Company ) SA Fire House Limited (Incorporated in the Republic of South Africa) Registration number 1957/003350/06 ( SA Fire House ) FIRM INTENTION BY SA FIRE HOUSE TO MAKE AN OFFER TO ACQUIRE THE ENTIRE ISSUED ORDINARY SHARE CAPITAL OF ZURICH NOT ALREADY HELD BY SA FIRE HOUSE AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 1. Introduction Zurich shareholders ( Shareholders ) are referred to the detailed cautionary announcement released on the Stock Exchange News Service ( SENS ) on 30 June 2015 ( Detailed Cautionary Announcement ), in which they were advised that SA Fire House, being the Company s majority shareholder and itself a wholly-owned subsidiary of Zurich s ultimate holding company, Zurich Insurance Group Ltd ( ZIG ), was expected to make an offer ( Offer ) to acquire the entire issued ordinary share capital of Zurich, not already held by SA Fire House ( Scheme Shares ) by way of a scheme of arrangement ( Scheme ) in accordance with the Companies Act, No. 71 of 2008, as amended ( Companies Act ). Shareholders are advised that SA Fire House has yesterday submitted a letter to the board of directors of Zurich ( Zurich Board ) constituting a firm intention by SA Fire House to make the Offer as contemplated in Chapter 5 of the Companies Act and Chapter 5 of the Companies Regulations, 2011 ( Companies Regulations ) ( Firm Intention ). The Zurich Board has appointed an independent committee of the Board ( Independent Board ) to consider the terms of the Offer and the Scheme. SA Fire House currently holds Zurich ordinary shares, representing approximately 84.1% of the issued ordinary share capital of Zurich ( Zurich Shares ). SA Fire House proposes to implement the Offer by way of a Scheme, in terms of section 114, read with section 115, of the Companies Act, to be proposed by SA Fire House between Zurich and the holders of Scheme Shares ( Scheme Participants ) as at the record date of the Scheme. The Offer, if accepted, and the Scheme, if implemented, will result in the Zurich Shares being delisted from the exchange operated by the JSE Limited ( JSE ) ( Delisting ). The purpose of this firm intention announcement ( Firm Intention Announcement ) is to provide Shareholders with the salient terms of the Offer, in compliance with Regulation 101 of the Companies Regulations. 2. Offer Consideration SA Fire House proposes to acquire the Scheme Shares from Scheme Participants for an acquisition consideration ( Offer Consideration ) of R240 per Scheme Share, payable in cash, representing an 1

2 aggregate Offer Consideration of R (calculated on the basis of Scheme Shares). The Offer Consideration will escalate by 6% per annum calculated from 1 October 2015 to the date of payment, if payment of the Offer Consideration has not been made to Scheme Participants on or by 30 September Offer mechanism SA Fire House proposes to implement the Offer by way of the Scheme, on the following basis: The Scheme is proposed in accordance with section 114 of the Companies Act, read with section 115 of the Companies Act, and will constitute an affected transaction as defined in section 117 (iii) of the Companies Act. As such, the Scheme will be regulated by the Companies Act, the Companies Regulations and the Takeover Regulation Panel ( TRP ). The posting of the Scheme circular ( Circular ) to Shareholders will be subject to the fulfilment or waiver, as the case may be, of the posting conditions, set out in paragraph 0 below. The implementation of the Scheme will be subject to the Scheme conditions precedent, set out in paragraph 8 below. As a consequence of implementing the Scheme, Zurich will no longer meet the criteria for listing set out in the JSE Listings Requirements and accordingly, the Delisting will be implemented pursuant to paragraph 1.16(b) of the JSE Listings Requirements. The Scheme is required to be approved by Scheme Participants passing a special resolution in accordance with the provisions of section 115(2) of the Companies Act ( Scheme Resolution ) at a general meeting convened for this purpose ( Scheme Meeting ). Upon implementation of the Scheme, SA Fire House will make payment of the Offer Consideration to Scheme Participants for the acquisition of their Scheme Shares and all the Scheme Shares will be transferred to and registered in the name of SA Fire House. Upon completion of this transfer of the Scheme Shares to SA Fire House, SA Fire House shall be the sole shareholder of Zurich. 4. Rationale The conversion of Zurich into a wholly-owned subsidiary of SA Fire House and ultimately, ZIG, will facilitate the leveraging of ZIG s global resources and capabilities for the purpose of enhancing the Company s position as a leading South African insurance carrier. The Delisting will furthermore result in significant reductions in regulatory compliance and stakeholder reporting activities. This reduction will allow for meaningful savings in management time and costs within the Company. 5. Cash guarantee 2

3 The Offer Consideration will be settled by SA Fire House in cash. As required in terms of the Companies Act and Companies Regulations, Citibank, N.A., South Africa Branch (registration number 1995/007396/10) has provided a cash guarantee ( Cash Guarantee ) to the TRP in respect of SA Fire House s financial obligation to effect payment of the Offer Consideration due in terms of the Scheme, which Cash Guarantee is in a form acceptable to the TRP and complies with regulations 111(4) and 111(5) of the Companies Regulations. 6. Shareholder support for the Scheme As stated in the Detailed Cautionary Announcement, Scheme Participants holding in excess of 75% of the Scheme Shares have provided SA Fire House with irrevocable undertakings ( Irrevocable Undertakings ) to accept the Offer and to vote in favour of the special and ordinary resolutions necessary to authorise and implement the Scheme. The following Scheme Participants have provided Irrevocable Undertakings: Shareholder: Old Mutual Investment Group Proprietary Limited (acting through Old Mutual Equity Boutique) Number of Scheme Shares Percentage of Scheme Shares (%) Norges Bank Investment Management* Old Mutual Investment Group Proprietary Limited (acting in representative capacity) * Note: (*) Scheme Shares held on behalf of clients in terms of discretionary and/or non-discretionary mandates. 7. Posting conditions Further details pertaining to the Scheme will be set out in the Circular, incorporating a notice convening the Scheme Meeting in order to consider and, if deemed fit, to pass the special and ordinary resolutions necessary to authorise and implement the Scheme. 3

4 The posting of the Circular to Shareholders will be subject to the fulfilment or waiver of the following conditions, by no later than Thursday, 6 August 2015 (or such later date as SA Fire House and Zurich may agree in writing, which date shall not be later than Wednesday, 26 August 2015): (1) the independent expert ( Independent Expert ) retained by Zurich in terms of section 114(2) of the Companies Act has prepared and issued a report expressing the opinion that the Offer Consideration is fair and reasonable to Shareholders; (2) the Independent Board recommends to the Shareholders that they vote in favour of the Scheme; and (3) to the extent applicable, the JSE and the TRP approve the posting of the Circular. The conditions in paragraphs (1) and (2) are for the benefit of SA Fire House and may be waived by the SA Fire House in its sole discretion by notice to Zurich in writing. The condition in paragraph 0 is regulatory in nature and cannot be waived, although the time period within which such condition is to be fulfilled may be extended by SA Fire House in its sole discretion by notice to Zurich in writing. 8. Scheme Conditions Precedent The Scheme is subject to the fulfilment of the following conditions precedent ( Scheme Conditions Precedent ), on or before 17:00 on Friday, 4 September 2015: (1) the approval of the Scheme by the requisite majority of Shareholders (other than SA Fire House, which is excluded from the Offer) as contemplated in section 115(2)(a) of the Companies Act, and: (a) to the extent required, the approval of the implementation of such special resolution by a court in terms of section 115(2) and/or section 115(3) of the Companies Act; and (b) if applicable, Zurich not treating the aforesaid special resolution as a nullity, as contemplated in section 115(5)(b) of the Companies Act; and (2) in respect of the implementation of the Scheme, and to the extent applicable, the approval of the Financial Surveillance Department of the South African Reserve Bank, the JSE and the TRP (either unconditionally or subject to conditions as may be acceptable to SA Fire House). The Scheme Conditions Precedent cannot be waived. SA Fire House will be entitled to extend the date for fulfilment of any of the Scheme Conditions Precedent, by up to 60 days, in its sole discretion, by notice in writing to Zurich and subject to the approval of or conditions imposed by the TRP, but shall not be entitled to extend the date to a date later than the aforesaid 60 day period without the prior written consent of Zurich and subject to the approval of or any conditions imposed by the TRP. 9. Voting at the Scheme Meeting In accordance with section 115(4) of the Companies Act and regulation 84 of the Companies Regulations, SA Fire House and any directors of SA Fire House who are Shareholders and any other parties deemed 4

5 to be acting in concert with SA Fire House are precluded from voting at the Scheme Meeting on the special and ordinary resolutions necessary to authorise and implement the Scheme, and their Zurich Shares will be excluded: for purposes of determining whether the applicable quorum requirement for the Scheme Meeting is satisfied; and for purposes of determining the total number of Scheme Shares eligible to vote on the special and ordinary resolutions necessary to authorise and implement the Scheme. 10. Independent Board and Independent Expert s fair and reasonable opinion The Scheme is an affected transaction in terms of section 117 of the Companies Act. Accordingly, an Independent Board comprising Stuart G Morris (Chairperson), John M Vice and Mandiza N Mbekeni, has been constituted to consider the terms of the Scheme. In accordance with section 114(2) of the Companies Act and regulation 110 of the Companies Regulations, the Independent Board has appointed KPMG Services Proprietary Limited ( KPMG ) as the Independent Expert to provide the Independent Board with external advice in relation to the Scheme and to make appropriate recommendations to the Independent Board for the benefit of Scheme Participants. The report containing the Independent Expert s opinion will be contained in the Circular. 11. Posting of the Circular It is expected that the Circular, incorporating a notice of Scheme Meeting, will be posted to Shareholders on or about 7 August A further announcement setting out the salient dates and times in relation to, inter alia, the posting of the Circular and the Scheme Meeting to be held on or about 4 September 2015 will be released in due course. 12. Delisting An application will be made by Zurich to the JSE to terminate the listing of the Zurich Shares on the JSE following implementation of the Scheme. 13. Salient dates Action 2015 Posting of Circular to Shareholders and notice of Scheme Meeting released on SENS Salient dates announcement, notice of Scheme Meeting published in the press Scheme Meeting to be held Friday, 7 August Tuesday, 11 August Friday, 4 September Notes: 5

6 The above dates are subject to change and, if changed, will form the basis of a further announcement in due course. 14. Withdrawal of cautionary announcement Shareholders are advised that, following publication of the terms of the Scheme herein, the Detailed Cautionary Announcement referred to in paragraph 1 is hereby withdrawn and caution is no longer required to be exercised by Shareholders when dealing in Zurich Shares. 15. Responsibility Statement The Independent Board accepts responsibility for the information contained in this Firm Intention Announcement to the extent that it relates to Zurich. To the best of its knowledge and belief, such information contained in this Firm Intention Announcement is true and nothing has been omitted which is likely to affect the importance of such information. The board of directors of SA Fire House accepts responsibility for the information contained in this Firm Intention Announcement to the extent that it relates to SA Fire House. To the best of its knowledge and belief, such information contained in this Firm Intention Announcement is true and nothing has been omitted which is likely to affect the importance of such information. Johannesburg 30 July 2015 Corporate advisor and sponsor to Zurich Rand Merchant Bank, a division of FirstRand Bank Limited Legal advisor to SA Fire House Norton Rose Fulbright South Africa Inc Independent Expert KMPG Services Proprietary Limited 6