AARIS Cancels Everest Re Workers Comp Contract

June 22, 2004

The Barbados-based Everest Re Group, Ltd. reported, as a follow-up to its press release of June 16, 2004 (See IJ Website “West” June 17), that it has now received notice of termination with respect to its contract with American All Risk Insurance Services, Inc. (AARIS).

AARIS had been acting as the company’s insurance agency, and produced the majority of Everest Re Group’s California workers’ compensation business.

The bulletin noted that under the terms of the present contract, “AARIS will continue to produce business exclusively for the Company for 120 days, through October 15, 2004. The business produced under this relationship will continue in force until each policy’s next expiration date or cancellation.”

Everest Re’s bulletin also added the following comments:
— The Company had been aware that AARIS had been considering other insurer affiliations and developed contingency plans for writing California workers’ compensation business. The Company intends to implement these plans, as appropriate, to remain an active participant in this market.

— The Company noted that the AARIS relationship accounted for approximately 12 percent of its full year gross written premiums in 2003 and that this percentage was expected to decline as the Company has been confronted with additional competition and market rate decreases in 2004.

— The Company is maintaining its guidance for the range of 2004 estimated operating income [note] of $10.00 – $11.00 per diluted share, absent any unusual loss or market activity. However, due to continued strong performance of its underlying operations, including investments, the Company expects that it may revise this guidance upward in conjunction with the release of its second quarter earnings.

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