ACE Limited (NYSE: ACL) and Superior National Insurance Group (Nasdaq: SNTL) today announced that ACE USA has sold the renewal rights to the California workers' compensation book of its Commercial Insurance Services (CIS) business to Superior National.
The agreement follows the one announced by ACE last month to sell renewal rights to all other CIS business to Wausau Commercial Insurance, a unit of Liberty Mutual Group. These renewal agreements effectively complete ACE USA's decision to discontinue its middle market CIS business.
Under the agreement, Superior National will pay ACE USA a 3% ceding fee on gross written premiums renewed from December 1, 1999 through June 30, 2002. The California book of business amounts to about $30 million in gross written premiums on an annual basis. ACE USA will retain the in-force business and past liabilities.
"The agreement with Superior National gives our employees, producers and customers a smooth transition to a company focused on serving this market," said Dennis Reding, president and chief executive officer of ACE USA. "We are very pleased to reach an agreement that works out for all parties."
"We are delighted to reach this agreement to provide renewals to this book of business," said Arnold J. Senter, executive vice president and chief operating officer of Superior. "There is a natural synergy between the underwriting approach that CIS pursued and our own strategy, and both companies enjoy strong relationships with the producers of this business."
As part of the agreement, Superior will retain the 10 professionals serving the CIS workers' compensation book of business. "We are especially pleased to retain the very professional staff serving this business in California and make them part of the Superior family," said Senter.
ACE USA's financial advisor in this transaction was Banc of America Securities LLC.
Superior National Insurance Group, Inc., headquartered in Calabasas, CA., is the parent company of Superior National Insurance Company and California Compensation Insurance Company, specialty workers' compensation insurers operating throughout the United States.
This release contains forward-looking statements by Superior National within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Actual results could differ materially from those projected in forward-looking statements as a result of the variability of business conditions and the inherent difficulty of accurately forecasting revenues and expenses.
The ACE Group of Companies provides insurance and reinsurance for a diverse group of clients. The company conducts its business on a global basis with operating subsidiaries in nearly 50 countries. Additional information can be found at: www.acelimited.com.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:
Any forward-looking statements made in this press release reflect ACE Limited's and ACE USA's current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties which may cause actual results to differ from those set forth in these statements. Competition in the industry, the frequency of unpredictable catastrophic events, actual loss experience and economic, regulatory, insurance and reinsurance business conditions and other factors identified in ACE Limited's filings with the Securities and Exchange Commission could affect the forward-looking statements contained in this press release. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. ACE Limited undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.