S&P Publishes Comparison Study on U.S. Surplus and Specialty Lines Insurers

April 7, 2005

Standard & Poor’s Ratings Services named Houston-based HCC Insurance Holdings Inc. as the leader in surplus and specialty insurance lines, in a new report – “Peer Comparison: U.S. Surplus And Specialty Lines Insurers” – issued today, April 7.

S&P said it had ranked five insurers according to their strengths and weaknesses in seven categories: “competitive position, management and corporate strategy, operating performance, capitalization, liquidity, investments, and financial flexibility.

“In descending order, the report ranked the five companies as follows: HCC, RLI Insurance Co., Markel Corp., RSUI Indemnity Co., and Argonaut Group Inc.” S&P’s press bulletin noted that “surplus lines writers serve an important role in the insurance industry as a safety valve for difficult-to-insure risks. Because they are free of most regulatory requirements for rate and policy form approval in the U.S., surplus lines writers can respond quickly to changing market dynamics and raise rates or tailor coverage as needed to match the peculiarity and volatility of the risks underwritten.”

S&P stressed, however, that the report does not characterize the five companies as sector leaders. “The world’s largest insurers, notably American International Group, dominate the surplus lines business through their affiliates, which are often part of intercompany pooling arrangements, making it difficult to assess the operating performance of the sector leaders,” the bulletin explained.

The report is available to subscribers of RatingsDirect, Standard & Poor’s Web-based credit research and analysis system, at: www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to research_request@standardandpoors.com. Ratings information can also be found on Standard & Poor’s public Web site at: www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. All Standard & Poor’s research information is accessible for 24 hours after publication on the public Web site.

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