Supplementary information to the April 26, 2004 announcement of the new embedded value and appraisal value of our subsidiary, Cathay Life Insurance Co.,Ltd.

2004-04-28

1.Date of the investor/press conference:2004/04/26 2.Location of the investor/press conference: International Conference Hall of Cathay Life Insurance Co.(B1,296,Sec.4,Ren-Ai Road,Taipei,Taiwan) 3.Financial and business related information: Cathay Life disclosed that its embedded value as of March 31, 2004, and based on internal purposes, was between approximately NT$215 to NT$240 billion, or NT$42.9 and NT$47.7 per common share of Cathay Life, and that its appraisal value was between approximately NT$407 to NT$501 billion, or NT$80.9 and NT$99.7 per common share of Cathay Life. In addition, the embedded value as of December 31, 2003 was calculated to be between approximately NT$200 and NT$223 billion, or NT$40.6 and NT$45.2 per common share of Cathay Life, and the appraisal value to be between approximately NT$388 and NT$480 billion, or NT$78.6 and NT$97.4 per common share of Cathay Life. The major assumptions used to calculate the embedded value and appraisal value were as follows: investment return: 5%, and risk discount rate: 9.7 - 11.7%. Based on Cathay Financial Holdings’current 8.0 billion shares outstanding, the embedded value is equivalent to a range of approximately NT$27.0 and NT$30.0 per share and the appraisal value is equivalent to a range of approximately NT$50.9 to NT$62.7 per share. The assumptions applied to calculate the new embedded value and appraisal value include an investment return of 5.0%, and risk discount rates of 9.7% - 11.7%. According to Cathay Life, the Risk Based Capital system was introduced as of July 2003 and its impact is included in the current calculations. If the impact of the RBC requirement is excluded, the embedded value would be equivalent to a range of approximately NT$263 billion to NT$281 billion and the appraisal value would be equivalent to a range of approximately NT$488 billion to NT$573 billion. Previously, in July 2003, Cathay Life released estimates of its embedded value and appraisal value as of March 31, 2003. At that time, the embedded value was in the range of approximately NT$197 billion to NT$210 billion and appraisal value was in the range of approximately NT$394 billion to NT$473 billion. 4.Any other matters that need to be specified:NA