Business Moves

August 8, 2005

Berkshire Hathaway, General Electric

Omaha, Neb.-based Berkshire Hathaway and Kansas City, Mo.-based General Electric announced that GE Insurance Solutions’ sale of Medical Protective Corporation to Columbia Insurance, a unit of Berkshire Hathaway, became effective recently. The sale price was $825 million.

With more than $700 million in annual premium and $2 billion in statutory assets, Medical Protective is a national leader in primary medical professional liability coverage and risk solutions for primary healthcare providers. Its products are underwritten by the Medical Protective Co., which holds Standard & Poor’s highest rating, “AAA,” and are distributed through a nationwide network of employee market managers and appointed agents.

American International Underwriters American International Group Inc. announced that its subsidiary, American International Underwriters Insurance Company, has been notified that it will receive a license from the government of Vietnam to operate a wholly owned general insurance company in Vietnam.

Vietnam’s Prime Minister, Phan Van Khai, announced the license recently at the Asia Society in New York City. This would be the first general insurance license granted by Vietnam to a U.S.-based insurance organization.

The license would permit AIG to operate a general insurance company throughout Vietnam. The name of the company will be AIG General Insurance (Vietnam) Company Limited (AIG Vietnam), which will market property/casualty insurance products to both individuals and businesses. AIG Vietnam will be headquartered in Hanoi. AIG Vietnam expects to begin operations as soon as all regulatory approvals are in place, which are anticipated by the end of the year.

AssuranceAmerica Corp.

AssuranceAmerica Corporation has announced its expansion into Alabama’s auto insurance market with sales of its first auto insurance policies in the state. The Atlanta-based company is represented by more than 300 independent agents and now markets auto policies in Alabama, Florida, Georgia and South Carolina.

AssuranceAmerica focuses on the specialty automobile insurance marketplace. Its principal operating subsidiaries are TrustWay Insurance Agencies, which sell personal automobile insurance policies through its 32 retail agencies, AssuranceAmerica Managing General Agency and AssuranceAmerica Insurance Co.

Established in 2000, AssuranceAmerica Managing General Agency develops and markets insurance products, underwrites insurance risks, adjusts insurance claims and binds new policies.

In 2002, AssetAmerica and AssuranceAmerica Managing General Agency wrote an aggregate of approximately $56 million in premiums. AssuranceAmerica Insurance Company, which was formed in the fourth quarter of 2002, began writing business in Georgia on April 1, 2003.

Vesta, Affirmative Insurance

Alabama-based Vesta Insurance Group Inc. has agreed to sell its remaining stake of Affirmative Insurance Holdings Inc. to an entity jointly owned by affiliates of each of Delaware Street Capital and JC Flowers & Co. LLC for $15.00 per share in a privately negotiated transaction.

Vesta collectively owns approximately 5.2 million shares of Affirmative common stock. Vesta’s ownership of Affirmative stock is divided between its primary insurance company, which owns approximately 4.2 million shares and its holding company, which owns approximately 1.0 million shares. The transaction is subject to customary closing conditions, including the receipt of necessary regulatory approvals, and the transaction is expected to close following regulatory approval. On June 1, 2005, Vesta sold 2.0 million shares back to Affirmative for $14.00 per share.

Vesta will receive approximately $78.0 million from the sale before expenses and plans to use the proceeds to support its property-casualty operations. Vesta is a holding company for a group of insurance and financial services companies that offer a range of consumer products.

Brown & Brown, Greenwich Insurance

Brown & Brown Inc. announced that Greenwich Insurance Company, XL Capital Ltd’s U.S.-based primary insurer (Greenwich), will become the new carrier for the Lawyer’s Protector Plan (LLP) insurance program, effective as of Sept. 1, 2005. Brown & Brown and XL will be joining their respective programs together, creating one of the largest lawyers’ professional liability insurance programs in the country for law firms with one to 10 attorneys.

The LPP is a division of Brown & Brown Inc., a publicly held insurance intermediary traded on the New York Stock Exchange. The LPP began operations in 1983 and has since become one of the largest providers of professional liability insurance to small law firms in the United States. When combined with XL’s professional liability program for small law firms, the LPP program will provide coverage to over 8,000 law firms in 42 states and the District of Columbia.

Greenwich Insurance Company is a primary insurance company licensed to write property and casualty insurance throughout the United States and is a member insurer of XL Capital Ltd’s insurance operations branded as “XL Insurance.”

HRH, Doherty Inc.

Hilb Rogal & Hobbs Company, an insurance and risk management intermediary, has acquired substantially all of the assets of Doherty Inc., an employee benefits brokerage operation in Fort Scott, Kan. Terms of the transaction were not disclosed.

Doherty Inc. was founded in 1980 by Donald Doherty and provides a wide range of employee benefits consultation and brokerage services, specializing in life, health and disability insurance programs. Revenues for 2004 were approximately $300,000.

Doherty and his associates will continue to operate from their Fort Scott office through the remainder of 2005, at which time they will merge with HRH’s Pittsburgh, Kansas operation under the leadership of its president, David Cavenah. The operation is part of HRH’s Central region, led by Vice President, Central Regional Director William Chaufty.

Carroll County (Md.) Mutual Fire

Mutual Fire Insurance Company of Carroll County has been successfully rehabilitated and has emerged from state receivership in Maryland as a fully operational insurer.

Carroll County Mutual, which has been in business in Maryland for 130 years, will continue operations under the ownership of insurance agent John J. Scott, Sr.

As part of the $5 million purchase agreement with Snow, Carroll County Mutual will remain a Maryland-based insurance company for at least 10 years and maintain its headquarters in Westminster, Md. for at least 7 years.

When Carroll County Mutual was placed in receivership in April 2004, a search for investors was undertaken. The new investor, Scott, started Associated Insurance Management in Silver Spring, Md. in 1969 with a group of producers. Associated is a now a $50 million insurance agency.

As of June 28, 2005, Carroll County Mutual maintained nearly 8,000 policies, mostly homeowners, in the state.

Strategy International, VGV

Strategy International Insurance Group Inc. announced from its Toronto office that it has been named by Value Guaranteed Vacations Inc. (VGV Inc.) as the exclusive insurer for its affinity program, the VGV Program.

Coverage will be provided through two of its subsidiary companies, Strategy Holding Company Limited and Strategy Insurance Limited, a provider of specialty lines of insurance, reinsurance and structured risk underwriting focusing on credit risk and credit enhancement.

Strategy explained that VGV Inc. introduced its affinity program to the North American timeshare industry in April 2004. As one of its many benefits, the VGV Program includes a buy-back option which allows timeshare owners to re-sell their timeshare interest to VGV Inc. at the end of 10, 15 or 20 years for up to 95 percent of the initial purchase price.

Strategy becomes the exclusive underwriter for the VGV Program, which it expects to generate $50 million in premium income in the 2006 calendar year.

Strategy Insurance Limited is a Barbados-formed and licensed provider of specialty lines of insurance, reinsurance and structured risk underwriting, focusing on credit risk and credit enhancement. It is a wholly-owned subsidiary of Strategy Holding Company Limited, a Barbados company which is itself a wholly-owned subsidiary of Strategy International Insurance Group Inc. It conducts its insurance and reinsurance operations principally through its subsidiary incorporated in Barbados, West Indies. Strategy has offices in Barbados, London and Toronto.

R&SA, ING Insurance Co.

ING Canada announced that Royal & SunAlliance Canada has acquired the renewal rights of ING Insurance Company of Canada’s $13-million commercial marine insurance business, effective Sept. 1, 2005.

Under the terms of the agreement, R&SA has acquired the renewal rights to all ING Insurance’s commercial ocean marine insurance business, which includes hull, cargo and liability insurance as well as yacht programs underwritten through several Managing General Agencies.

ING Insurance will however continue to sell insurance to individual yacht owners as part of their home or cottage coverage.

Arthur J. Gallagher, Classic

Arthur J. Gallagher & Co. has acquired Classic Insurance Services Ltd. of Lisle, Ill. Terms of the transaction were not disclosed.

Incorporated in 1983, Classic Insurance Services Ltd. offers medical professional liability services for their physician and surgery center clients in the Midwest.

Vincent Lovelle and his associates will continue to operate out of their Lisle location as a unit of Gallagher Healthcare Insurance Services, a subsidiary of Arthur J. Gallagher & Co.

They will be under the direction of James Braniff, III, South Central Regional manager of Gallagher’s Brokerage Services Retail Division.

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