role in the strategic alliance established by Zurich Insurance Group, Trygg-Hansa and Home Holdings Inc.

In an effort to reduce its exposure to loss-making Home Holdings Inc., majority shareholder Trygg-Hansa AB agreed this week to sell part of its shareholding to Zurich Insurance.

Zurich, the parent of Bermuda based Centre Re which in turn owns ZCI, will invest at least $104 million in Home Holdings including a $98 million loan. It could end up purchasing all of Trygg's 65.4 percent shareholding for about $200 million.

In effect, the agreement means Home Holdings will be liquidated, remaining in activity only to service those of its customers that Zurich does not take over. Trygg-Hansa hopes to dispose of all of its shares in Home Holdings during the next eight years.

Mr. Erwin Kradolfer, head of investor relations at Zurich Insurance said his company is prepared to take the financial gamble because of the opportunity to tap Home Holding's customer base.

The companies have reached an agreement in principle. Home Holdings is expected to complete a share re-purchase transfer, under which its shareholders, other than Trygg-Hansa, Zurich and its affiliates, will receive $10 per share in cash. Home Holdings will subsequently be delisted from the New York Stock Exchange, and is expected to enter liquidation proceedings next year.

Apart from the share purchase the deal is still contingent on a number of approvals from company boards and US regulatory officials.

Clients of Home Holdings insurance subsidiaries, including the Home Insurance Company, effective immediately will be offered access to Zurich's superior credit standing, on new and renewal Home Insurance policies.

Home Holdings will enter into an agreement with Risk Enterprise Management Ltd. (REM), a ZCI subsidiary, to manage the operations of Home Holdings and its subsidiaries, and to properly service Home Insurance's existing insurance clients.