Commerce Insurance, Commerce Banc Pursue Partnership Over Lawsuit

August 9, 2007

The Commerce Group, Inc., a property/casualty insurer based in Webster, Mass., and Commerce Banc Insurance Services of Cherry Hill, New Jersey, report they have reached an agreement to explore partnership opportunities in various states and to resolve the trademark suit pending in federal court in Massachusetts.

Under the agreement, the two companies will explore opportunities through The Commerce Insurance Co. and its affiliates, which would offer personal and small commercial lines of business through Commerce Banc Insurance Services in Massachusetts and New Jersey, with the potential for additional arrangements in other states in the future.

In addition, Commerce Banc Insurance Services has agreed to refrain from using the “Commerce” name in Massachusetts for insurance-related services. In turn, The Commerce Group, Inc. has agreed that it will not operate under the name The Commerce Insurance Co. in certain Mid-Atlantic states, including New Jersey, where it will use its other insurance operating subsidiaries, including American Commerce Insurance Co.

“We are very excited about the potential of a partnership with Commerce Banc Insurance Services in Massachusetts, New Jersey, and beyond” said Gerald Fels, president, CEO and chairman of the board of The Commerce Group, Inc. “We are particularly pleased that, through this new relationship, we have the opportunity to further our goal of expanding the geographic scope of our business, together with another successful company.”

“Developing successful partnerships with customer-focused underwriters is a key to our continuing success,” said Commerce Banc Insurance Services’ Chairman George Norcross. “We look forward to exploring opportunities to work with The Commerce Group in the future.”

The two said specific details regarding the future business arrangement have not yet been finalized.

The Commerce Group, Inc.’s property and casualty insurance subsidiaries include The Commerce Insurance Co. and Citation Insurance Co. in Massachusetts, Commerce West Insurance Co. in California, American Commerce Insurance Co. in Ohio, and State-Wide Insurance Co. in New York. Through its subsidiaries’ combined insurance activities, the company is ranked as the 20th largest personal automobile insurance group in the country by A.M. Best, based on 2006 direct written premium. The company and its insurance subsidiaries are rated A+ (Superior) by A.M. Best.

Commerce Banc Insurance Services is the nation’s 23rd largest insurance brokerage firm with an annual premium volume exceeding $1 billion and a network of 13 offices. It was formed in 1996 and has grown through acquisitions in addition to internal growth.

Commerce Banc Insurance Services provides personal insurance coverage, commercial property and casualty and employee benefits. In recent years, CBIS also has expanded its focus to include specialty commercial insurance lines including coverages for education, executive risk, constructioin, non-profit, professional liability and surety.

The Commerce Group, Inc.

Commerce Banc Insurance Services

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