Liberty Seguros Portugal in Alliance with Portuguese Insurer Acoreana

March 7, 2006

The Liberty Mutual Group announced form its Boston headquarters that its Portuguese subsidiary, Liberty Seguros Portugal, has signed a memorandum of understanding with insurer Acoreana to form a strategic alliance in the Portuguese insurance business.

Liberty said that once the transaction is completed, “Liberty Seguros Portugal would become the fourth largest property and casualty insurer in Portugal, with a 7.1 percent market share based on 2005 numbers.”

Under the proposed agreement, Liberty Seguros Portugal would acquire Acoreana’s P/C business, becoming the P&C distributor, and Acoreana would acquire Liberty Seguros Portugal’s life portfolio, becoming the Life distributor.

The announcement added that the “two parties will simultaneously enter into a joint distribution agreement for the future sale of one another’s products. Financial terms of the transaction will be concluded once all due diligence is complete. The final transaction will be subject to approval by Portuguese authorities.”

Liberty Mutual has had operations in Portugal since 2002 when it acquired Winterthur’s Portuguese operations and companies.

“This transaction will help increase our competitive base in Portugal by providing a strong strategic alliance and operational fit with our current operations,” stated Liberty President and CEO Edmund F. Kelly. “We are delighted to add the distribution capability, product portfolio, management expertise and extensive market knowledge of Acoreana to our existing operations.”

Liberty Mutual also noted that its “international operations are managed through its strategic business unit, Liberty International. Liberty International provides insurance products and services through two distinct approaches. The first is through locally domiciled insurance companies based around the world, which provide mostly personal insurance products and services. The second approach is through Liberty International Underwriters (LIU), which provides specialty commercial lines of insurance worldwide, including casualty, specialty casualty, marine energy, engineering and reinsurance.

“Established in 1994, Liberty International’s operations reported approximately $3.9 billion in revenue in 2005. Liberty International has 7,000 employees and operations in the U.S. and 19 countries – Argentina, Australia, Brazil, Canada, Chile, China, Colombia, France, Germany, Hong Kong, Ireland, Portugal, Singapore, Spain, Switzerland, Thailand, United Kingdom, Venezuela and Vietnam.”

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