A.M. Best Assigns Rating to Underwriters Reinsurance Co.

July 2, 2003

A.M. Best Co. has assigned a financial strength rating of A (Excellent) to Underwriters Reinsurance Company (URC) (New Hampshire), soon to be renamed RSUI Indemnity Company. The rating outlook is stable.

The rating action follows the close of the transaction on July 1, in which Alleghany Corporation acquired Royal Specialty Underwriting, Inc. (RSUI), a managing underwriting agency, renewal rights to the ongoing business underwritten by RSUI and the related unearned premium reserve portfolio for $115 million.

To support future business to be underwritten, Alleghany also purchased URC from Swiss Reinsurance Company. It is expected that Alleghany will also acquire Landmark American Insurance Company as its surplus lines carrier to write the non-admitted business of RSUI and that the name of RSUI will be changed to Resurgens Specialty Underwriting, Inc.

As part of the transaction, Alleghany is not acquiring any loss reserves associated with business previously produced and earned by RSUI. To support future business to be underwritten, Alleghany has capitalized URC at approximately $500 million. The source of funds for the transaction consists of invested assets at both Alleghany Corporation and Alleghany Insurance Holdings LLC.

The assigned rating reflects URC’s excellent capitalization, the historical underwriting profitability of RSUI’s various books of business, Alleghany’s vital role in supporting and enhancing its business plan, as well as Alleghany’s financial flexibility and its historical track record of profitably operating well-capitalized insurance subsidiaries. RSUI has an established infrastructure and experienced book of business that will be moved to URC’s paper. A.M. Best anticipates that RSUI’s historical profitability will continue under Alleghany’s ownership.

Through wholesale brokers and producers, RSUI underwrites specialty coverage, which consists of monoline commercial property, including various lines of inland marine, umbrella and excess liability, general liability, directors and officers liability and professional liability.

The rating outlook is stable based upon the expectation that URC’s management will uphold its business plan, sustain profitable operating earnings and maintain adequate capitalization for the rating.

Alleghany Corporation is engaged through its subsidiaries, Alleghany Insurance Holdings LLC, World Minerals Inc. and Heads & Threads International LLC, in the businesses of insurance, industrial minerals and industrial fasteners. Alleghany Insurance Holdings LLC’s subsidiaries include Capitol Transamerica Corporation, which will be operated separately from the RSUI business.

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