Offer for PRI Group plc

RNS Number:8050J
BRIT Insurance Holdings PLC
09 April 2003



Part 1 of 2



   Not for release, publication or distribution in or into or from the United
                       States, Canada, Australia or Japan



                                                                    9 April 2003

                          Brit Insurance Holdings PLC



*       Offer for PRI Group plc to be made by Brit

*       Strategic acquisition to advance Brit's UK Division valuing PRI's
existing issued share capital at approximately #156 million

*       Brit has received undertakings and written statements of intent to
accept the Offer in respect of approximately 52.33 per cent. of PRI's existing
issued share capital





Summary



The board of Brit announces the terms of an all share offer to be made by Brit
for PRI.



*                 The Offer will be made on the basis of 1.703 New Brit Shares
for each PRI Share to which the Offer relates. Based on the Closing
Middle-Market Price for Brit Shares on 8 April 2003 (the last dealing day prior
to the announcement of the Offer), the Offer values each PRI Share at
approximately 120 pence and the entire existing issued share capital of PRI at
approximately #156 million.



*                 The Offer represents a premium of (i) approximately 7.20 per
cent. over the Closing Middle-Market Price of 112 pence for PRI Shares on 25
March 2003 (the day prior to the announcement by Brit that the boards of Brit
and PRI were in talks about a possible offer) and (ii) approximately 4.40 per
cent. over the Closing Middle-Market Price of 115 pence for PRI Shares on 8
April 2003, the last dealing day prior to the announcement of the Offer.



*                 Brit has received undertakings to accept the Offer from PRI
Shareholders and other persons in respect of, in aggregate, 18,558,374 PRI
Shares held or controlled by them, representing approximately 14.28 per cent.,
in aggregate, of PRI's existing issued share capital.



*                 In addition, those persons from whom Brit has received
undertakings to accept the Offer, as well as certain other persons, have written
to Brit stating their intention to accept the Offer in respect of, in aggregate,
68,032,243 PRI Shares held or controlled by them, (being all of the PRI Shares
held or controlled by them, including the PRI Shares in respect of which the
undertakings to accept the Offer have been given), representing approximately
52.33 per cent., in aggregate, of PRI's existing issued share capital.



*                 As at 8 April 2003, the last dealing day prior to the
announcement of the Offer, Brit was the registered holder and beneficial owner
of 811,215 PRI Shares, representing approximately 0.62 per cent. of PRI's
existing issued share capital. These PRI Shares, when aggregated with the PRI
Shares in respect of which Brit has received undertakings and written statements
of intent to accept the Offer, represent approximately 52.95 per cent., in
aggregate, of PRI's existing issued share capital.

*                 Due to its size, under the Listing Rules, the Offer will be
conditional on, inter alia, the approval of Brit Shareholders at an
extraordinary general meeting.

*                 Brit is in discussions with the PRI Board and continues to
seek its recommendation of the Offer.

*                 Rationale for the Offer:

    *             Brit has established itself as a leading listed UK insurance
group. The formation of Brit Underwriting, which includes Brit Group's Lloyd's
syndicates and other operations authorised and regulated by the FSA, has created
a unified business with a recognised market presence and established
infrastructure.



    *             Brit has built its "UK Division" over the past three years,
attracting experienced specialist underwriters from the London market, and, in
particular, has developed its UK motor and UK property insurance businesses and
has a growing presence in the UK small to medium commercial insurance sector.
Brit's Directors believe that there is an opportunity to establish a leading UK
insurance division which has critical mass in terms of underwriting capacity
across a range of insurance classes and with regional coverage.



    *             The Acquisition should advance Brit's plans to address this
opportunity and would combine Brit's market presence and infrastructure with
PRI's experienced team of UK liability underwriters and capital.  The
Acquisition would allow PRI's underwriting team to receive Brit Group's support
in the achievement of its business objectives and for the risks associated with
these to be reduced.  The Acquisition would also enable Brit to broaden its
range of products to an increased customer base.  Brit's Directors believe that
PRI represents an excellent strategic fit with Brit.



    *             In addition, the Acquisition would allow for the utilisation
of PRI's capital to be accelerated significantly.  Brit's Directors believe
that, as a result of Brit Group's underwriting operations being established and
diversified, the Enlarged Group would also benefit from a lower risk based
capital requirement than currently applies to PRI.



    *             The Enlarged Group should provide a strong alternative to
other insurers servicing the UK and other insurance markets. In particular,
following completion of the Acquisition, the capital base of Brit's FSA
authorised and regulated insurance company, BIL, would be increased to
approximately #270 million which would improve the Enlarged Group's potential
customer appeal and rating outlook.



    *             The Enlarged Group would be well placed to take advantage of
the continued strong insurance market conditions and to develop strong flows of
renewal business attracted to a UK based insurer with ownership of its capital
base and critical mass.



*                 Brit aims to generate a return on capital through the
insurance cycle that justifies and compensates for the risks and volatility
inherent in the core risk-taking business.  The terms of the Offer are such that
the Acquisition should increase shareholder value for Brit Shareholders and the
offer of New Brit Shares as consideration for the Acquisition would allow PRI
Shareholders to retain an interest in the insurance sector and to participate in
any future value creation by the Enlarged Group.



*                 The market capitalisation of the Enlarged Group would be
approximately #687 million (based on the terms of the Offer and the Closing
Middle-Market Price for Brit Shares as at 8 April 2003, the last dealing day
prior to the announcement of the Offer, and assuming exercise or vesting of all
options or awards outstanding under the PRI Share Option Schemes).



*                 The formal documentation relating to the Offer will be
despatched to PRI Shareholders and Brit Shareholders (other than certain
Overseas Shareholders) as soon as practicable (and, in any event, save with the
consent of the Panel, within 28 days of the date of this announcement).



Commenting on the Offer, Brit's Chairman, Clive Coates, said "We are
disappointed that, despite considerable efforts on our behalf and the support of
a majority of PRI's shareholders, the Board of PRI has as yet found itself
unable to recommend our offer.  We are excited at the prospect of combining both
businesses and look forward to working with the PRI team.  This is a tremendous
opportunity to continue our development of a leading UK insurance group."



This summary should be read in conjunction with the full text of the following
announcement. Appendix II to the following announcement contains definitions of
certain expressions used in this summary and the following announcement.





Enquiries:



Numis Securities                    Tel:  [phone]
(Financial Adviser to Brit)
Oliver Hemsley

Haggie Financial                    Tel: [phone]
(Public Relations Adviser to Brit)
David Haggie
Peter Rigby




Numis Securities, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Brit and no one else in connection with the
Offer and will not be responsible to anyone other than Brit for providing the
protections afforded to customers of Numis Securities nor for providing advice
in relation to the Offer or in relation to the contents of this announcement or
any transaction or arrangement referred to herein.



The Offer will not be made, directly or indirectly, and this announcement should
not be sent, in or into or from the United States, Canada, Australia or Japan or
by use of the mails or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or any facilities of a national securities exchange of, any of these
jurisdictions and doing so may render invalid any purported acceptance of the
Offer. Accordingly, unless otherwise determined by Brit and permitted by
applicable law, copies of this announcement and any other documents related to
the Offer are not being, and must not be, mailed or otherwise distributed or
sent in or into the United States, Canada, Australia or Japan.  Any person
(including, without limitation, custodians, nominees and trustees) who may have
contractual or legal obligations, or may otherwise intend, to forward this
announcement to any jurisdiction outside the United Kingdom should read the
relevant provisions of the Offer Document before taking any action.



This announcement is not intended to and does not constitute, or form part of,
an offer or an invitation to purchase any securities.






Part 2 of 2





   Not for release, publication or distribution in or into or from the United
                       States, Canada, Australia or Japan

                                                                    9 April 2003

                          Brit Insurance Holdings PLC





*       Offer for PRI Group plc to be made by Brit

*       Strategic acquisition to advance Brit's UK Division valuing PRI's
existing issued share capital at approximately #156 million

*       Brit has received undertakings and written statements of intent to
accept the Offer in respect of approximately 52.33 per cent. of PRI's existing
issued share capital





1.         Introduction



The board of Brit announces the terms of an all share offer, to be made by Brit,
to acquire the whole of the issued and to be issued ordinary share capital of
PRI not already owned by Brit.  Brit is in discussions with the PRI Board and
continues to seek its recommendation of the Offer.



Brit has received undertakings to accept the Offer from PRI Shareholders and
other persons in respect of, in aggregate, 18,558,374 PRI Shares held or
controlled by them, representing approximately 14.28 per cent., in aggregate, of
PRI's existing issued share capital. Further details of these undertakings are
set out in paragraph 10 of this announcement ("Undertakings to accept the
Offer").  In addition, those persons from whom Brit has received undertakings to
accept the Offer, as well as certain other persons, have written to Brit stating
their intention to accept the Offer in respect of, in aggregate, 68,032,243 PRI
Shares held or controlled by them (being all of the PRI Shares held or
controlled by them, including the PRI Shares in respect of which the
undertakings to accept the Offer have been given), and representing
approximately 52.33 per cent., in aggregate, of PRI's existing issued share
capital.



As at 8 April 2003, the last dealing day prior to the announcement of the Offer,
Brit was the registered holder and beneficial owner of 811,215 PRI Shares,
representing approximately 0.62 per cent. of PRI's existing issued share
capital. These PRI Shares, when aggregated with the PRI Shares in respect of
which Brit has received undertakings and written statements of intent to accept
the Offer, represent approximately 52.95 per cent., in aggregate, of PRI's
existing issued share capital.



Due to its size, under the Listing Rules, the Offer will be conditional on,
inter alia, the approval of Brit Shareholders at an extraordinary general
meeting.



2.         Terms of the Offer



The Offer, which will be made on the terms and subject to the conditions set out
below and in Appendix I to this announcement, and subject to the further terms
to be set out in the Offer Document and in the Form of Acceptance, will be made
on the following basis:



for each PRI Share                                        1.703 New Brit Shares



and so in proportion for any other number of PRI Shares held.



Fractions of New Brit Shares will not be allotted and issued to PRI Shareholders
and their entitlement will be rounded down to the nearest whole number of New
Brit Shares.



Based on the Closing Middle-Market Price for Brit Shares on 8 April 2003 (the
last dealing day prior to the announcement of the Offer), the Offer values each
PRI Share at approximately 120 pence and the entire existing issued share
capital of PRI at approximately #156 million.  This represents a premium of (i)
approximately 7.20 per cent. over the Closing Middle-Market Price of 112 pence
for PRI Shares on 25 March 2003 (the day prior to the announcement by Brit that
the boards of Brit and PRI were in talks about a possible offer) and (ii)
approximately 4.40 per cent. over the Closing Middle-Market Price of 115 pence
for PRI Shares on 8 April 2003, the last dealing day prior to the date of this
announcement.



The PRI Shares are to be acquired fully paid and free from all liens, charges,
equitable interests, encumbrances, rights of pre-emption and other third party
rights or interests of any nature whatsoever and together with all rights now or
hereafter attaching to them, including the right to receive and retain all
dividends and other distributions declared, made or paid on or after the date of
this announcement.



The New Brit Shares to be allotted and issued in connection with the Offer will
be allotted and issued credited as fully paid and will rank pari passu in all
respects with the existing issued Brit Shares, together with the right to
receive and retain in full all dividends and other distributions declared, made
or paid after the date of this announcement.



If the Offer becomes or is declared unconditional in all respects, full
acceptance of the Offer, assuming exercise or vesting of all options or awards
outstanding under the PRI Share Option Schemes, would result in the issue of up
to 228,031,700 New Brit Shares, representing approximately 23.38 per cent. of
the issued share capital of Brit as enlarged by the Acquisition.



Application will be made to the UK Listing Authority and the London Stock
Exchange for the New Brit Shares to be admitted, respectively, to listing on the
Official List and to trading on the London Stock Exchange's market for listed
securities.  It is expected that listing will become effective and that dealings
will commence in the New Brit Shares on the first dealing day following the day
on which the Offer becomes or is declared unconditional in all respects (save
only for the admission to trading of such New Brit Shares becoming effective).
Certificates for New Brit Shares to be allotted and issued to PRI Shareholders
will be despatched by no later than fourteen days after the Offer becomes or is
declared unconditional in all respects or fourteen days after receipt of a valid
acceptance of the Offer, whichever is later.



3.         Further terms of the Offer



Due to its size, under the Listing Rules, the Offer will be conditional upon,
inter alia, the approval of Brit Shareholders in general meeting.



The Offer will also be subject to the conditions and further terms set out in
Appendix I to this announcement and the further terms and conditions to be set
out in the Offer Document and Form of Acceptance.



The formal documentation relating to the Offer will be despatched to PRI
Shareholders and Brit Shareholders (other than certain Overseas Shareholders) as
soon as practicable (and, in any event, save with the consent of the Panel,
within 28 days of the date of this announcement).



4.         Rationale for the Offer



Brit has established itself as a leading listed UK insurance group. The
formation of Brit Underwriting, which includes Brit Group's Lloyd's syndicates
and other operations authorised and regulated by the FSA, has created a unified
business with a recognised market presence and established infrastructure.



Brit has built its "UK Division" over the past three years, attracting
experienced specialist underwriters from the London market and, in particular,
has developed its UK motor and UK property insurance businesses and has a
growing presence in the UK small to medium commercial insurance sector.  Brit's
Directors believe that there is an opportunity to establish a leading UK
insurance division which has critical mass in terms of underwriting capacity
across a range of insurance classes and with regional coverage.



The Acquisition should advance Brit's plans to address this opportunity and
would combine Brit's market presence and infrastructure with PRI's experienced
team of UK liability underwriters and capital.  The Acquisition would allow
PRI's underwriting team to receive Brit Group's support in the achievement of
its business objectives and for the risks associated with these to be reduced.
The Acquisition would also enable Brit to broaden its range of products to an
increased customer base.  Brit's Directors believe that PRI represents an
excellent strategic fit with Brit.



In addition, the Acquisition would allow for the utilisation of PRI's capital to
be accelerated significantly.  Brit's Directors believe that, as a result of
Brit Group's underwriting operations being established and diversified, the
Enlarged Group would also benefit from a lower risk based capital requirement
than currently applies to PRI.



The Enlarged Group should provide a strong alternative to other insurers
servicing the UK and other insurance markets. In particular, following
completion of the Acquisition, the capital base of Brit's FSA authorised and
regulated insurance company, BIL, would be increased to approximately #270
million which would improve the Enlarged Group's potential customer appeal and
rating outlook.  The rating of BIL was recently increased to A (Excellent) with
stable outlook by A.M. Best & Co. and confirmed as A (Strong) lifted to positive
outlook by Fitch.  In accordance with its standard procedures when it has not
been able to pre-review the terms of any potential transaction, A.M. Best & Co.
has placed BIL's rating on review following the announcement by Brit that the
boards of Brit and PRI were in talks about a possible offer.  Fitch has affirmed
its rating following the announcement of talks.



The Acquisition would increase the weighting of Brit Group's assets in its FSA
regulated insurance company, BIL, which has recently been granted permission by
the FSA to conduct all forms of insurance and reinsurance business in the UK.
In accordance with its previously announced plans, Brit is in the process of
transferring the underwriting of a number of its UK casualty classes to BIL from
its Lloyd's Syndicate 2987.  To date employers' liability, public liability, UK
motor fleet and motor broker business has been transferred.  The remaining
classes are to follow.



The Enlarged Group's forecast gross written premium for the 2003 year of account
would be expected to exceed #1.15 billion for its own account.



The Enlarged Group would be well placed to take advantage of the continued
strong insurance market conditions and to develop strong flows of renewal
business attracted to a UK based insurer with ownership of its capital base and
critical mass.



Brit aims to generate a return on capital through the insurance cycle that
justifies and compensates for the risks and volatility inherent in the core
risk-taking business.  The terms of the Offer are such that the Acquisition
should increase shareholder value for Brit Shareholders and the offer of New
Brit Shares as consideration for the Acquisition would allow PRI Shareholders to
retain an interest in the insurance sector and to participate in any future
value creation by the Enlarged Group.



The market capitalisation of the Enlarged Group would be approximately #687
million (based on the terms of the Offer and the Closing Middle-Market Price for
Brit Shares as at 8 April 2003, the last dealing day prior to the announcement
of the Offer, and assuming exercise or vesting of all options or awards
outstanding under the PRI Share Option Schemes).



5.         Information relating to Brit



Brit Group underwrites direct insurance and reinsurance business, employing
specialist underwriters for each class of business underwritten.  Brit Group's
underwriting activities are conducted through three principal risk-taking
entities - FSA authorised and regulated company, BIL, and Composite Syndicate
2987 and Life Syndicate 389 at Lloyd's.  Brit Group has a unified approach to
underwriting through Brit Underwriting, which includes Brit Group's Lloyd's
syndicates and other operations authorised and regulated by the FSA, with common
management and processes applied across these operations. The Brit Directors
believe that this approach enables a more effective allocation of capital across
the Brit Group's underwriting operations, allowing business to be written in the
optimum entity.



Brit Group is also interested in investment management activities conducted
through The Equity Partnership Limited and distribution activities through a
number of ventures, including Peoples Choice and Ri3K Limited.



The policy of the Brit Directors is to align Brit Group's capital base to the
insurance cycle so as to optimise capital efficiency.  Brit Group has raised,
through equity issues in December 2001 and October 2002, in aggregate,
approximately #350 million (net of expenses) in order to take advantage of the
improved rating climate and to enable it to support increased levels of
underwriting business in 2002 and 2003.



For the six months ended 30 June 2002, Brit Group reported gross written premium
of #397 million (2001: #204 million), an operating profit based on the long term
rate of investment return of #3.0 million (2001: #7.8 million) and a loss on
ordinary activities before tax of #4.3 million (2001: profit of #1.3 million).
The combined ratio for this period was 90.2 per cent. (2001: 96.2 per cent.).



Brit Group had shareholders' funds of #269.4 million as at 30 June 2002,
equivalent to net assets per Brit Share of 63.1 pence.  Net tangible assets at
30 June 2002 amounted to #243.9 million, equivalent to 57.1 pence per Brit
Share.  In October 2002, Brit raised approximately #193 million (net of
expenses) through the issue of new Brit Shares at 64 pence per Brit Share.



As at 30 June 2002, Brit Group had a net loss reserved in relation to the US
Terror Attack of $133.8 million, which was substantially unchanged from the
$132.2 million (#90.5 million) reported in Brit Group's annual accounts for the
year ended 31 December 2001.



6.         Information relating to PRI



PRI Group is a recently formed group pursuing a focused insurance underwriting
strategy principally in respect of professional indemnity, directors' and
officers' liability, warranty and indemnity and general liability.



In June 2002, PRI raised approximately #125 million (net of expenses) through an
issue of shares at the time of its admission to trading on AIM.  A.M. Best Co.
subsequently assigned PRI Group's FSA authorised principal operating subsidiary,
PRI Limited, an initial financial strength rating of A- (Excellent).  PRI
Limited began underwriting risks on 1 September 2002 and, as at 31 December
2002, had a staff of 40, 21 of whom were underwriters.



For the six months ended 31 December 2002, PRI Group reported gross written
premium of #18.5 million, an operating loss based on the long term rate of
investment return of #1.1 million and a loss on ordinary activities before tax
of #1.45 million.  The combined ratio for this period was 95.4 per cent.



PRI Group had shareholders' funds of #123.5 million as at 31 December 2002,
equivalent to net assets of 95 pence per existing issued PRI Share.  Net
tangible assets at 31 December 2002 amounted to #122.7 million, equivalent to
94.4 pence per existing issued PRI Share.



7.         Current trading and prospects



Brit Group's gross written premiums for its own account are now forecast to be
increased to approximately #1 billion for 2003 (previously forecast to be
approximately #850 million) and approximately #660 million for 2002. As stated
in its update on current trading conditions released on 13 February 2003, to
date Brit's claims activity for the 2002 year of account has remained low and it
has experienced very positive 2003 renewals.



As previously announced in line with Lloyd's requirements, and prior to the
announcement of the results for Brit Group's FSA authorised and regulated
company, BIL, the preliminary forecast result for Composite Syndicate 2987 for
the 2002 year of account is as follows:-


Syndicate                     Capacity                     Brit                          Forecast Result Range as % of
                                                                                                              Capacity
Number                        #'000                        Owned Capacity

2987                          450,000                      97.78%                                          9.0 - 14.0*



*The result for Composite Syndicate 2987 for 2002 would be 12.5% - 17.5% prior
to internal quota share arrangements with BIL.  This forecast has been made at
an early stage and assumes a "normal" level of loss development between now and
the closure of the year of account.



In its preliminary results for the period ended 31 December 2002, PRI reported
that it had made a strong start to the current financial year.



As stated in paragraph 4 of this announcement ("Rationale for the Offer"), the
Enlarged Group's forecast written premium for the 2003 year of account would be
expected to exceed #1.15 billion for its own account.  With the premium rate
increases experienced last year and the current strong trading conditions in
most underwriting categories, the Brit Directors are confident that the
prospects of the Enlarged Group look encouraging.



Brit Group's results for the current financial period would be affected by the
increased levels of new business, following the Acquisition, as a proportion of
the Enlarged Group's total premiums, as well as by the one-off costs of the
Acquisition and the integration of PRI. However, the Brit Directors expect the
prospects of the Enlarged Group to be enhanced through the benefits outlined in
paragraph 4 of this announcement, the accelerated utilisation of PRI's capital
and, over time, operational efficiencies.



It is not the current intention of the Brit Directors that further equity would
be raised by the Company during the next 12 months to fund organic growth of the
Enlarged Group.  However, the Brit Directors will continue to be mindful of, and
explore, other potential acquisition opportunities which they believe would both
increase shareholder value and prove a good strategic fit.



8.         Dividend policy



Brit Group is currently not in a position to pay a dividend due to historic
losses and a lack of distributable reserves.  Brit Group's dividend policy is to
restore payment of a dividend as soon as it is practicable to do so.



9.         Compulsory acquisition and cancellation of trading



If Brit receives acceptances under the Offer in respect of 90 per cent. or more
of the PRI Shares to which the Offer relates, Brit intends to exercise its
rights pursuant to the provisions of Sections 428 to 430F (inclusive) of the Act
to acquire compulsorily the remaining PRI Shares to which the Offer relates.



Brit intends, following the Offer becoming or being declared unconditional in
all respects, to procure that PRI applies to the London Stock Exchange for the
cancellation of the admission of PRI Shares to trading on AIM.  Cancellation of
trading would significantly reduce the liquidity and marketability of any PRI
Shares in respect of which acceptances of the Offer are not submitted.  Brit
also intends to seek to procure the re-registration of PRI as a private company
under the relevant provisions of the Act.



10.       Undertakings to accept the Offer



Brit has received undertakings from certain institutional PRI Shareholders to
accept the Offer in respect of, in aggregate, 18,558,374 PRI Shares,
representing approximately 14.28 per cent. of the existing issued share capital
of PRI.  These undertakings will, at the option of the relevant donor, cease to
be binding if an improved offer or proposed offer for the entire issued share
capital of PRI (other than any PRI Shares held by the competing offeror) is
announced, the making of which is not, or has ceased to be, subject to any
pre-condition.



Two of the donors of these undertakings have agreed that any such improved offer
must, in the case of a cash offer, be at a cash price per PRI Share of greater
than 132 pence and, in the case of an offer which contains a share or other
non-cash element, must be at an equivalent value per PRI Share of greater than
144 pence provided that any such non-cash element must consist of a security
which is, or will on its issue be, listed or quoted on the Official List or
equivalent main market in the United States, France or Germany.  The other donor
of these undertakings can decide what, in its reasonable opinion, represents an
improvement to the terms of the Offer but has confirmed that it would regard the
above as such an improvement.



In addition, those persons from whom Brit has received undertakings to accept
the Offer, as well as certain other persons, have written to Brit stating their
intention to accept the Offer in respect of, in aggregate, 68,032,243 PRI Shares
held or controlled by them (being all of the PRI Shares held or controlled by
them, including the PRI Shares in respect of which the undertakings to accept
the Offer have been given), and representing approximately 52.33 per cent., in
aggregate, of PRI's existing issued share capital.



11.       Directors and employees



Brit intends to discuss with the PRI Directors the roles which they might play
in the development of the Enlarged Group.



Brit intends that, following the Offer becoming or being declared unconditional
in all respects, the existing employment rights, including pension rights, of
the directors and employees of PRI Group will be fully safeguarded.



12.       PRI Share Option Schemes



The Offer will extend to any PRI Shares which are unconditionally allotted or
issued fully paid (or credited as fully paid) including pursuant to the exercise
or vesting of options or awards under the PRI Share Option Schemes prior to the
date on which the Offer closes (or such earlier date as Brit may, subject to the
Code, determine).  The Brit Directors have assumed that all options and awards
which are so exercised or so vest will be satisfied by the issue of new PRI
Shares.



To the extent that such options or awards are not exercised or do not vest in
full, it is intended that appropriate proposals will be made to Option Holders
once the Offer becomes or is declared unconditional in all respects.



13.       Disclosure of interests in PRI



As at 8 April 2003 (the last dealing day prior to the announcement of the
Offer), Brit, and persons deemed to be acting in concert with Brit for the
purposes of the Offer, owned or controlled 811,215 PRI Shares.



Save for the above interests and pursuant to the undertakings and statements of
intent referred to in paragraph 10 of this announcement, neither Brit nor, so
far as Brit is aware, any party acting in concert with Brit for the purposes of
the Offer, owns or controls any PRI Shares or holds any options over or has
entered into any derivative referenced to securities of PRI which remains
outstanding on 8 April 2003, being the last dealing day prior to the
announcement of the Offer.



14.       Further details of the Offer



Brit intends to despatch the Offer Document, setting out full details of the
Offer, and the Form of Acceptance as soon as practicable (and, in any event,
save with the consent of the Panel, within 28 days of the date of this
announcement).



This announcement is not intended to and does not constitute an offer or an
invitation to purchase any securities. The conditions and principal further
terms of the Offer are set out in Appendix I to this announcement.



The definitions of terms used in this announcement are contained in Appendix II
to this announcement.





Enquiries:



Numis Securities                    Tel:  [phone]
(Financial Adviser to Brit)
Oliver Hemsley

Haggie Financial                    Tel:  [phone]
(Public Relations Adviser to Brit)
David Haggie
Peter Rigby




Numis Securities, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Brit and no one else in connection with the
Offer and will not be responsible to anyone other than Brit for providing the
protections afforded to customers of Numis Securities nor for providing advice
in relation to the Offer or in relation to the contents of this announcement or
any transaction or arrangement referred to herein.



The Offer will not be made, directly or indirectly, and this announcement should
not be sent, in or into or from the United States, Canada, Australia or Japan or
by the use of the mails or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce
of, or any facilities of a national securities exchange of, any of these
jurisdictions and doing so may render invalid any purported acceptance of the
Offer.  Accordingly, unless otherwise determined by Brit and permitted by
applicable law, copies of this announcement and any other documents related to
the Offer are not being, and must not be, mailed or otherwise distributed or
sent in or into the United States, Canada, Australia or Japan. Any person
(including, without limitation, custodians, nominees and trustees) who may have
contractual or legal obligations, or may otherwise intend, to forward this
announcement to any jurisdiction outside the United Kingdom should read the
relevant provisions of the Offer Document before taking any action.



This announcement is not intended to and does not constitute, or form part of,
an offer or an invitation to purchase any securities.






                                   Appendix I



1.         Conditions and certain terms of the Offer





The Offer will comply with the applicable rules and regulations of the Code and
the Listing Rules, will be governed by English law and will be subject to the
jurisdiction of the Courts of England and Wales.  The Offer will be subject to
the terms and conditions to be set out in the Offer Document and accompanying
Form of Acceptance and will be subject to the following conditions:

(a)       valid acceptances being received (and not, where permitted, withdrawn)
by no later than 3.00 p.m. (London time) on the First Closing Date (or such
later time(s) and/or date(s) as Brit may, subject to the rules of the Code,
decide) in respect of not less than 90 per cent. in nominal value (or such
lesser percentage as Brit may decide) of the PRI Shares to which the Offer
relates, provided that this condition shall not be satisfied unless Brit and/or
its wholly-owned subsidiaries shall have acquired or agreed to acquire, whether
pursuant to the Offer or otherwise, PRI Shares carrying, in aggregate, more than
50 per cent. of the voting rights normally exercisable at general meetings of
PRI, including for this purpose (to the extent, if any, required by the Panel)
any such voting rights attaching to any PRI Shares which are unconditionally
allotted or issued fully paid (or credited as fully paid) before the Offer
becomes or is declared unconditional as to acceptances, whether pursuant to the
exercise of any subscription rights, conversion rights or otherwise.  For the
purposes of this condition:-



(i)        the expression "PRI Shares to which the Offer relates" shall be
construed in accordance with sections 428-430F (inclusive) of the Act; and



(ii)            PRI Shares which have been unconditionally allotted but not
issued shall be deemed to carry the voting rights which they will carry on
issue;



(b)       the passing at an extraordinary general meeting of Brit (or at any
adjournment thereof) of all such resolutions as may be necessary to approve,
implement and effect the Offer and the Acquisition;



(c)       admission of the New Brit Shares (i) to listing on the Official List
becoming effective in accordance with the Listing Rules of the UK Listing
Authority and (ii) to trading on the London Stock Exchange's market for listed
securities becoming effective in accordance with paragraph 2.1 of the Admission
and Disclosure Standards made by the London Stock Exchange from time to time, or
(if Brit so determines and subject to the consent of the Panel) the UK Listing
Authority and the London Stock Exchange agreeing to admit such New Brit Shares
to listing and trading, respectively, subject to allotment of such New Brit
Shares and/or the Offer becoming or being declared unconditional in all
respects;



(d)       the FSA having notified Brit in writing in terms satisfactory to Brit
(Brit acting reasonably in assessing whether such terms are satisfactory) that
it does not object to any person who will, pursuant to the Offer and/or pursuant
to the Acquisition or the proposed acquisition of any shares in, or control of,
PRI by Brit, become a controller of PRI for the purposes of the Financial
Services and Markets Act 2000;



(e)       without limitation to condition (g) below, the Office of Fair Trading
indicating, in terms reasonably satisfactory to Brit, that it is not the
intention of the Secretary of State for Trade and Industry to refer the proposed
acquisition of PRI by Brit, or any matters arising therefrom, to the Competition
Commission, or the Secretary of State for Trade and Industry accepting
undertakings from Brit in terms satisfactory to Brit, in relation to the
proposed acquisition of PRI by Brit instead of referring it to the Competition
Commission;



(f)        save as disclosed in the announcement by PRI on 28 March 2003 of its
preliminary results for the period ended 31 December 2002, or as publicly
announced by PRI by the delivery of an announcement to a Regulatory Information
Service prior to the date of this announcement, or as disclosed in the Admission
Document, or as fairly disclosed in writing to Brit prior to the date of this
announcement (such public announcements, disclosures or information being
referred to in these terms and conditions as being "revealed"), there being no
provision of any agreement, authorisation, arrangement, franchise, consent,
licence, permit or other instrument to which any member of the Wider PRI Group
is a party or by or to which any such member or any of its assets may be bound,
entitled or subject, which as a result of the Offer or the proposed acquisition
by Brit of any shares in, or control of, PRI or otherwise, is reasonably likely
to result (in any case to an extent which is material in the context of the
Wider PRI Group taken as a whole) in:-



(i)        any monies borrowed by, or any other indebtedness, actual or
contingent, of or any grant available to, any such member being or becoming
repayable or capable of being declared repayable immediately or earlier than its
stated maturity date, or the ability of any such member to borrow monies or
incur any indebtedness being withdrawn, prohibited or inhibited or becoming
capable of being withdrawn, prohibited or inhibited;



(ii)       any such agreement, authorisation, arrangement, franchise, consent,
licence, permit or instrument or the rights, liabilities, obligations or
interests of any such member thereunder being or becoming capable of being
terminated or adversely modified or affected or any onerous obligation arising
or any adverse action being taken or arising or any obligation or liability
arising thereunder;



(iii)      the rights, liabilities, obligations, interests or business of any
such member in or with any other person, firm, company or body (or any
arrangements relating to such rights, liabilities, obligations, interests or
business) being terminated, modified or adversely affected;



(iv)      any assets or interests of any such member being or falling to be
disposed of or charged or ceasing to be available to any such member or any
right arising under which any such asset or interest could be required to be
disposed of or charged or could cease to be available to any such member
otherwise than in the ordinary course of business;



(v)       the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
such member or any such security (whenever created, arising or having arisen)
becoming enforceable or being enforced;



(vi)      the value of any member of the Wider PRI Group or its financial or
trading position, profits and prospects being prejudiced or adversely affected;



(vii)     the creation of any liabilities (actual or contingent) by any member
of the Wider PRI Group;



(viii)    any such member ceasing to be able to carry on business under any name
under which it presently does so or, so far as the PRI Directors are aware
having made reasonable enquiry, any person presently not able to carry on
business under any name under which any member of the Wider PRI Group presently
does becoming able to do so;



and no event having occurred which, under any provision of any such arrangement,
authorisation, agreement, licence, consent, permit, franchise or other
instrument, could result in any of the events or circumstances which are
referred to in paragraphs (i) to (viii) of this condition (f) in any case to an
extent which is or would be material in the context of the Wider PRI Group taken
as a whole;



(g)       no government, government department or governmental,
quasi-governmental, supranational, statutory, regulatory, environmental or
investigative body or authority (including, without limitation, any national
anti-trust or merger control authority), court, trade agency, professional
association, institution or any other body or person whatsoever in any
jurisdiction (each a "Third Party" and all collectively "Third Parties") having
instituted, implemented or threatened, or having decided to institute, implement
or threaten, any action, proceeding, suit, investigation, enquiry or reference
or having made, proposed or enacted any statute, regulation, order or decision
or taken any other steps which is reasonably likely to (in any case to an extent
which is material in the context of the Wider PRI Group or the Wider Brit Group,
as the case may be, in each case taken as a whole):-



(i)        make the Offer or its implementation or the Acquisition or the
proposed acquisition by Brit of all or any PRI Shares, or the acquisition or
proposed acquisition of other securities in, or control of, PRI by Brit, void,
illegal and/or unenforceable under the laws of any relevant jurisdiction, or
otherwise, directly or indirectly, restrain, restrict, prohibit, challenge,
frustrate, delay or interfere with the same, or impose additional material
conditions or obligations with respect thereto, or otherwise require material
amendment to the terms of the Offer or any such acquisition (including, without
limitation, taking any steps which would entitle the PRI Board to require Brit
to dispose of all or some of its PRI Shares or restrict the ability of Brit to
exercise voting rights in respect of some or all of such PRI Shares);



(ii)       require, prevent or delay the divestiture, or alter the terms
envisaged for any proposed divestiture, by any member of the Wider Brit Group or
any member of the Wider PRI Group of all or any material portion of their
respective businesses, assets or properties or impose any limitation on the
ability of any of them to conduct their respective businesses or to own any of
their respective assets or property to an extent which is material in the
context of the Wider Brit Group or the Wider PRI Group taken as a whole,
respectively;



(iii)      impose any limitation on, or result in a delay in, the ability of any
member of the Wider Brit Group or of the Wider PRI Group to acquire or hold or
exercise effectively, directly or indirectly, all or any rights of ownership in
respect of shares or other securities (or the equivalent) in any member of the
Wider PRI Group or to exercise management control over any such member;



(iv)      otherwise adversely affect in any respect any or all of the
businesses, assets, profits or prospects of any member of the Wider Brit Group
or any member of the Wider PRI Group respectively;



(v)       result in any member of the Wider PRI Group ceasing to be able to
carry on business or impose any limitation on the ability of any member of the
Wider Brit Group or any member of the Wider PRI Group to integrate or co-
ordinate its business, or any part of it, with the business of any member of the
Wider PRI Group or the Wider Brit Group;



(vi)      save pursuant to the Offer, require any member of the Wider Brit Group
or of the Wider PRI Group to offer to acquire any shares or other securities (or
the equivalent) in any member of the Wider PRI Group owned by any third party,



and all applicable waiting and other time periods during which any such Third
Party could decide to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference under the laws of any
relevant jurisdiction or enact any such statute, regulation, order or decision
or take any steps having expired, lapsed or been terminated;



(h)       all authorisations, orders, recognitions, grants, determinations,
consents, licences, confirmations, clearances, certificates, permissions and
approvals (each an "Authorisation") which are necessary or considered
appropriate by Brit or any other member of the Wider Brit Group (Brit or any
such member of the Wider Brit Group acting reasonably in considering whether any
such Authorisation is appropriate) in any relevant jurisdiction for or in
respect of the Offer or the Acquisition or the proposed acquisition of any
shares or other securities in, or control of, PRI or any other member of the
Wider PRI Group by any member of the Wider Brit Group or the carrying on by any
member of the Wider PRI Group of its business having been obtained, in terms and
in a form reasonably satisfactory to Brit from all appropriate Third Parties or
from any persons or bodies with whom any member of the Wider PRI Group has
entered into contractual arrangements, in each case where the absence of such
Authorisation from such a person might have a material adverse effect on any
member of the Wider PRI Group and all such Authorisations remaining in full
force and effect and there being no notice or intimation of any intention to
revoke, withdraw, withhold, suspend, restrict, modify, amend or not to renew any
of the same;



(i)        all notifications and filings which are necessary having been made,
all appropriate waiting and other time periods (including any extensions of such
waiting and other time periods) under any applicable legislation or regulation
of any relevant jurisdiction having expired, lapsed or been terminated (as
appropriate) and all necessary statutory or regulatory obligations in any
relevant jurisdiction having been complied with in each case in connection with
the Offer or the Acquisition or the proposed acquisition of any shares or other
securities in, or control of, PRI or any other member of the Wider PRI Group by
any member of the Wider Brit Group where, in each case, the absence of such
compliance might have a material and adverse affect on the business of any
member of the Wider PRI Group;



(j)        no notification having been received from any relevant authority or
other person that any interests held by the Wider PRI Group under licences,
patents, trademarks, leases and other rights in the UK and overseas will be
adversely affected (in any case to an extent which is material to the Wider PRI
Group taken as a whole) by the Offer or the proposed acquisition of PRI Shares
by Brit, or that such licences, patents, trademarks, leases and other rights are
no longer in full force and effect, or that there is an intention to revoke any
of the same;



(k)       save as revealed, no member of the Wider PRI Group having:-



(i)        (save as between PRI and wholly-owned subsidiaries of PRI, or for
options granted or on the exercise of rights to subscribe for PRI Shares
pursuant to the exercise of options granted or the exercise of rights under the
PRI Share Option Schemes on or prior to the date hereof) issued, agreed to
issue, authorised or proposed the issue or grant of additional shares of any
class, or securities convertible into, or rights, warrants or options to
subscribe for, or acquire, any such shares or convertible securities or
redeemed, purchased or reduced or announced any proposal to redeem, purchase or
reduce any part of its share capital;



(ii)       recommended, declared, paid or made or proposed to declare, pay or
make any bonus, dividend or other distribution whether payable in cash or
otherwise other than to PRI or wholly-owned subsidiaries of PRI;



(iii)      merged with or demerged any body corporate or acquired or disposed of
or transferred, mortgaged or charged or created any security interest over any
assets or any rights, title or interest in any asset (including shares and trade
investments), or authorised or proposed or announced any intention to propose
any merger, demerger, acquisition, disposal, transfer, mortgage, charge or the
creation of any security interest over the same (other than in the ordinary
course of business);



(iv)      (save as between PRI and wholly-owned subsidiaries of PRI) authorised
or proposed, or announced an intention to propose, any change in its share or
loan capital including the purchase of any of its own shares;



(v)       issued, authorised or proposed the issue of or made any change in or
to any debentures or incurred or increased any indebtedness or become subject to
a liability (actual or contingent) which in any case is outside the ordinary
course of business and material in the context of the Wider PRI Group taken as a
whole;



(vi)      entered into, implemented, effected, varied, authorised or proposed
any contract, reconstruction, amalgamation, scheme, commitment, merger, demerger
or other transaction or arrangement or waived or compromised any claim in
respect of itself or another member of the Wider PRI Group, in each case
otherwise than in the ordinary course of business, which in any case is material
in the context of the Wider PRI Group taken as whole;



(vii)     proposed any voluntary winding up;



(viii)    terminated or varied the terms of any agreement or arrangement between
any member of the Wider PRI Group and any other person in a manner which is
reasonably likely to have a material adverse effect on the position or prospects
of the Wider PRI Group;



(ix)      proposed, agreed to provide or modified the terms of any share option
scheme, incentive scheme or other benefit relating to the employment or
termination of employment of any person employed by the Wider PRI Group which,
taken as a whole, are material in the context of the Wider PRI Group taken as a
whole;



(x)       entered into, varied, or authorised any agreement, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which:



(A)      is of a long term, onerous or unusual nature or magnitude or which is
or could involve an obligation of such nature or magnitude; or



(B)       is other than in the ordinary course of business,



and which in any such case is material in the context of the Wider PRI Group
taken as a whole;



(xi)      entered into or changed the terms of any contract, agreement or
arrangement with any director or senior executive of any member of the Wider PRI
Group;



(xii)     taken any corporate action or had any legal proceedings instituted or
threatened against it or petition presented or order made for its winding-up
(voluntarily or otherwise), dissolution or reorganisation or for the appointment
of a receiver, trustee, administrator, administrative receiver or similar
officer of all or any material part of its assets and revenues or any analogous
or equivalent steps or proceedings in or under the laws of any jurisdiction
having occurred or there having been appointed any analogous person in any
jurisdiction which in any case is material in the context of the Wider PRI Group
taken as a whole;



(xiii)    been unable, or admitted in writing that it is unable, to pay its
debts generally or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business in any case which is or
would be material in the context of the Wider PRI Group taken as a whole;



(xiv)    made any material alteration to its memorandum or articles of
association;



(xv)     entered into any agreement, contract, commitment or arrangement which
consents to or results in the restriction of the scope of the business of any
member of the Wider PRI Group or any member of the Wider Brit Group which, in
any such case, is material in the context of the Wider PRI Group or the Wider
Brit Group taken as a whole, respectively;



(xvi)    entered into any agreement, commitment or arrangement or passed any
resolution or made any offer (which remains open for acceptance) to enter into
any agreement, commitment or arrangement or proposed or announced any intention
with respect to any of the transactions, matters or events referred to in this
condition (k);



(l)        save as revealed and to the extent material in any case in the
context of the Wider PRI Group taken as a whole:-



(i)        no material adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or prospects of any
member of the Wider PRI Group;



(ii)       no claim being made, and no circumstance having arisen which might
lead to a claim being made, under the insurance of any member of the Wider PRI
Group which might have a material adverse effect on the Wider PRI Group;



(iii)      no litigation, arbitration proceedings, prosecution or other legal
proceedings or investigation having been instituted, announced, implemented or
threatened by or against or remaining outstanding against any member of the
Wider PRI Group or to which any member of the Wider PRI Group is or may become a
party (whether as plaintiff, defendant or otherwise);



(iv)      no contingent or other liability of any member of the Wider PRI Group
having arisen or become apparent or increased which in any such case might
reasonably be expected materially and adversely to affect any member of the
Wider PRI Group;



(v)       (other than as a result of the Offer) no enquiry or investigation by,
or complaint or reference to, any Third Party having been threatened, announced,
implemented, instituted by or against or remaining outstanding against or in
respect of any member of the Wider PRI Group which in any such case is material
and adverse in the context of the Wider PRI Group taken as a whole;



(m)      Brit not having discovered after the date of this announcement:-



(i)        that any financial or business or other information publicly
announced at any time by or on behalf of any member of the Wider PRI Group is
misleading or contains a misrepresentation of any fact or omits to state a fact
necessary to make the information contained therein not misleading (and which
was not subsequently corrected before the date of this announcement by
disclosure either publicly or otherwise fairly in writing to Brit) in each case
to an extent that the effect of the inaccuracy or misrepresentation of fact or
omission is or is reasonably likely to be material and adverse in the context of
the Wider PRI Group taken as a whole;



(ii)       that any member of the Wider PRI Group and any partnership, company
or other entity in which any member of the Wider PRI Group has a significant
interest is subject to any liability (contingent or otherwise) which has not
been publicly announced and which is material in the context of the Wider PRI
Group taken as a whole;



(iii)      any information which affects the import of any information disclosed
at any time by or on behalf of any member of the Wider PRI Group to an extent
which is material and adverse in the context of the Wider PRI Group taken as a
whole.



2.         Certain further terms of the Offer



Brit will reserve the right to waive, in whole or in part, all or any of the
above conditions except conditions (a) to (c).  The Offer will lapse unless the
conditions set out above are fulfilled or satisfied or (if capable of waiver)
waived by Brit or, where appropriate, have been determined by Brit in its
reasonable opinion to be or to remain satisfied no later than midnight on the
twenty first day after the later of the First Closing Date and the date on which
the Offer becomes or is declared unconditional as to acceptances, or such later
date as Brit may, with the consent of the Panel, decide.



Each of conditions (a) to (m) shall be regarded as a separate condition and
shall not be limited by reference to any other condition.



Brit shall be under no obligation to waive or treat as fulfilled any of
conditions (d) to (m) (inclusive) by a date earlier than the date specified
above for the fulfilment thereof notwithstanding that the other conditions of
the Offer may at such earlier date have been fulfilled and that there are at
such earlier date no circumstances indicating that any of such conditions may
not be capable of fulfilment.



Unless the Panel otherwise agrees, the Offer will lapse if there is a reference
to the Competition Commission before the later of 3.00 p.m. on the First Closing
Date and the time and date at which the Offer becomes or is declared
unconditional as to acceptances.



In circumstances where the Offer lapses, the Offer will cease to be capable of
further acceptances and persons accepting the Offer and Brit will cease to be
bound by acceptances delivered on or before the date on which the Offer so
lapses.



The PRI Shares which are the subject of the Offer will be acquired under the
Offer fully paid and free from all liens, equities, charges, encumbrances,
rights of pre-emption and any other third party rights or interests of any
nature whatsoever and together with all rights now or hereafter attaching
thereto, including the right to receive and retain in full all dividends and
other distributions declared, made or paid after the date of this announcement.



If Brit is required by the Panel to make an offer for PRI Shares under the
provisions of Rule 9 of the Code, Brit may make such alterations to the
conditions, including to condition (a), as may be necessary to comply with the
provisions of that Rule.



For the purposes of these conditions: the "Wider PRI Group" means PRI and its
subsidiaries, subsidiary undertakings, associated undertakings and any other
undertakings, in which PRI and/or such undertakings (aggregating their
interests) have a significant interest and the "Wider Brit Group" means Brit and
its subsidiaries, subsidiary undertakings, associated undertakings and any other
undertakings in which Brit and/or such undertakings (aggregating their
interests) have a significant interest, and, for these purposes, "subsidiary",
"subsidiary undertaking", "associated undertaking" and "undertaking" have the
meanings given by the Act, other than paragraph 20(l)(b) of Schedule 4A to the
Act which shall be ignored for this purpose, and "significant interest" means a
direct or indirect interest in 20 per cent. or more of the total voting rights
conferred by the equity capital of an undertaking.



The Offer will be on the terms and will be subject to the conditions which are
set out in part 1 above and those terms and conditions which will be set out in
the Offer Document and in the Form of Acceptance and such further terms as may
be required to comply with the Listing Rules and the applicable rules and
regulations of the Financial Services Authority, the London Stock Exchange and
the provisions of the Code.  The Offer and any acceptances thereunder will be
governed by English law and will be subject to the jurisdiction of the courts of
England and Wales.



Fractions of New Brit Shares will not be allotted or issued pursuant to the
Offer.



The Offer will comply with English law and the City Code.



The Offer will not be made, directly or indirectly, in or into or from the
United States, Canada, Australia or Japan.






Appendix II



                                  Definitions





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


"Act"                                      the Companies Act 1985 (as amended)

"Acquisition"                              the proposed acquisition of PRI to be effected by means of the Offer

"Admission Document"                       the AIM admission document published by PRI dated 19 June 2002

"AIM"                                      the Alternative Investment Market of the London Stock Exchange

"Australia"                                the Commonwealth of Australia, its states, territories and possessions

"BIL"                                      Brit Insurance Limited, a wholly owned subsidiary insurance company of Brit

"Brit"                                     Brit Insurance Holdings PLC, a company registered in England and Wales with
                                           registered number 3121594

"Brit Directors"                           the directors of Brit

"Brit Group"                               Brit and its subsidiary and associated undertakings

"Brit Shareholders"                        holders of Brit Shares

"Brit Shares"                              ordinary shares of 25 pence each in the capital of Brit

"business day"                             a day (other than a Saturday or Sunday) on which banks are generally open
                                           for business in the City of London

"Canada"                                   Canada, its provinces and territories and all areas subject to its
                                           jurisdiction and any political sub-division thereof

"Closing Middle-Market Price"              the closing middle market quotation for a PRI Share or a Brit Share (as
                                           appropriate) as derived from the Daily Official List

"Code"                                     the City Code on Takeovers and Mergers

"Daily Official List"                      the Daily Official List of the London Stock Exchange

"dealing day"                              a day on which dealings in domestic securities may take place on, and with
                                           the authority of, the London Stock Exchange

"Enlarged Group"                           the Brit Group, as enlarged by the Acquisition

"First Closing Date"                       the date which is 21 days after the posting of the Offer Document

"Form of Acceptance"                       the form of acceptance and authority for use in connection with the Offer
                                           accompanying the Offer Document

"FSA"                                      the Financial Services Authority

"gross written premium"                    gross written premium (gross of brokerage and other acquisition costs)

"Listing Rules"                            the rules and regulations of the UK Listing Authority, made pursuant to
                                           Part VI of the Financial Services and Markets Act 2000, as amended from
                                           time to time

"Lloyd's"                                  The Society and Corporation of Lloyd's created and governed by the Lloyd's
                                           Acts 1871-1982, including the Council of Lloyd's (and its delegates and
                                           other persons through whom the Council may act), as the context may require

"London Stock Exchange"                    London Stock Exchange plc

"New Brit Shares"                          the new Brit Shares to be allotted and issued to PRI Shareholders (other
                                           than certain Overseas Shareholders) credited as fully paid pursuant to the
                                           Offer

"Numis Securities"                         Numis Securities Limited

"Offer"                                    the offer to be made by Brit to acquire all of the issued and to be issued
                                           PRI Shares other than the PRI Shares already owned by Brit, subject to the
                                           terms and conditions to be set out in the Offer Document and in the Form of
                                           Acceptance including, where the context requires, any subsequent revision,
                                           variation, extension or renewal of such offer

"Offer Document"                           the document to be despatched to PRI Shareholders (other than certain
                                           Overseas Shareholders) setting out the full terms and conditions of the
                                           Offer and, where appropriate, any other document(s) containing terms and
                                           conditions of the Offer constituting the full terms and conditions of the
                                           Offer

"Official List"                            the Official List of the UK Listing Authority

"Option Holders"                           the holders of options or awards under the PRI Share Option Schemes or
                                           other options to subscribe for PRI Shares

"Overseas Shareholders"                    PRI Shareholders or Brit Shareholders (as applicable) whose registered
                                           addresses are outside the UK or who are citizens or residents of countries
                                           other than the UK

"Panel"                                    The Panel on Takeovers and Mergers

"Peoples Choice"                           Peoples Choice (Europe) Limited, in which Brit has a controlling interest
                                           of approximately 82 per cent.

"PRI"                                      PRI Group plc, a company registered in England and Wales with registered
                                           number 4379024

"PRI Board"                                the board of directors of PRI

"PRI Directors"                            the directors of PRI

"PRI Group"                                PRI and its subsidiary and associated undertakings

"PRI Shareholders"                         holders of PRI Shares

"PRI Share Option Schemes"                 the PRI Performance Share Plan, the PRI Share Option Plan and the PRI Share
                                           Incentive Plan

"PRI Shares"                               ordinary shares of 5 pence each in the capital of PRI

"Regulatory Information Service"           any of the services set out in Schedule 12 to the Listing Rules

"subsidiary" or "subsidiary undertaking"   have the meanings given to them by the Act

"UK Listing Authority"                     the Financial Services Authority in its capacity as the competent authority
                                           for the purposes of Part VI of the Financial Services and Markets Act 2000

"United Kingdom" or "UK"                   the United Kingdom of Great Britain and Northern Ireland

"United States" or "USA"                   the United States of America, its territories and possessions and all other
                                           areas subject to its jurisdiction, any state of the United States of
                                           America and the District of Columbia

"US Terror Attack"                         the attacks on the World Trade Center in New York (including the collapse
                                           of the World Trade Center Towers) and the Pentagon in Washington DC and the
                                           aviation crash in Pittsburgh, all of which occurred on 11 September 2001

"Wider PRI Group                           as defined in Part 2 of Appendix I to this announcement

"Wider Brit Group"                         as defined in Part 2 of Appendix I to this announcement










                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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