Argonaut Group Acquires Renewal Rights of Fireman’s Fund Binding Authority Business

April 4, 2005

San Antonio-based Argonaut Group Inc., a national underwriter of specialty insurance products in niche areas of the property and casualty market, announced it has reached an agreement with Fireman’s Fund Insurance Company to acquire the renewal rights and certain operating assets of the Binding Authority business segment. The Binding Authority unit is currently underwritten by Interstate Insurance Group, a subsidiary of Fireman’s Fund.

Argonaut Group, through its Excess and Surplus (E&S) segment, Colony, will begin offering policies to the Binding Authority customers for transportation and other E&S business. Based in Richmond, Va., Colony underwrites difficult risks not serviced by standard carriers and focuses on small to medium-sized businesses in a wide variety of industries and professions.

Argonaut Group President and Chief Executive Officer, Mark E. Watson III, commented, “We continue to look for high-value opportunities to provide more predictable growth and expand our presence within our niche markets. This transaction furthers those goals in our E&S segment.”

“The Binding Authority business model, while profitable, is not a long-term strategic fit for Fireman’s Fund,” said Arthur E. Moossmann, president of Specialty Insurance for Fireman’s Fund. “The transfer of this book of business to Argonaut will allow our Specialty Insurance business to concentrate on the specialized underwriting focus of its marine and casualty products, delivered through focused distribution channels.”

Colony president, Dale Pilkington, added, “Because the Binding Authority segment of Fireman’s Fund is recognized as an experienced and profitable underwriter of E&S transportation business, the addition of this segment will complement our existing array of specialty products.”

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