HCC Completes Acquisition of St. Paul Espana

January 2, 2003

Houston’s HCC Insurance Holdings, Inc. announced that it has completed the acquisition of the St. Paul’s Spanish operations, St. Paul Espana, Compania de Seguros, S.A., headquartered in Madrid.

The acquired operations will be renamed Houston Casualty Company Europe, Compania de Seguros, S.A., but they will operate as HCC Europe. It also plans on an immediate cash injection to increase HCC Europe’s capitalization to 25 million Euros ($26.17 million). The company also indicated that it expects the subsidiary to be accorded an ‘AA’ rating from S&P and an ‘A+’ Rating from A.M. Best in line with its own level.

“HCC Europe will continue to be a market leader in Spain for contract surety and professional indemnity lines of business, where rates are rising substantially. In addition MAG Global Financial Products, an insurance underwriting agency based in Barcelona, Spain, also recently acquired by HCC, will begin to write their existing Directors and Officers business on behalf of HCC Europe, ” said the bulletin.

Stephen L. Way, Chairman and CEO commented that “The European Union is a very important market for our business and particularly our new financial products including Directors & Officers and Errors & Omissions insurance. HCC Europe will enable us to deliver specialty coverage with a strong balance sheet.”

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