Arch Capital Group Ltd. to Acquire Rock River Insurance Company

Business Wire, Sept 24, 2001

Business Editors

GREENWICH, Conn.--(BUSINESS WIRE)--Sept. 24, 2001

Arch Capital Group Ltd. (NASDAQ: ACGL) announced today that it has entered into a definitive agreement to acquire Rock River Insurance Company, an approved excess and surplus lines insurer in 45 states and the District of Columbia and an admitted insurer in two other states. Under the terms of the agreement, the existing policies and other liabilities of Rock River will be reinsured or otherwise assumed by the seller, Sentry Insurance a Mutual Company, which has an A.M. Best rating of A . The transaction is contingent on obtaining applicable regulatory approvals and other customary closing conditions.

The acquisition of Rock River will provide Arch Risk Transfer Services ("ART Services"), Arch Capital's recently acquired insurance program and alternative market business, with the capability of writing excess and surplus lines business. The ART Services group of companies currently includes First American Insurance Company, an admitted insurer with licenses in 49 states and an A.M. Best rating of A-. It is anticipated that Rock River will be owned by First American, which will increase First American's surplus to over $50 million. Rock River will also provide the Arch Capital Group with an additional vehicle to access attractive underwriting opportunities which may arise from other insurance distribution businesses owned by Arch Capital.

Arch Capital Group Ltd. is a Bermuda-based, diversified financial services company with over $500 million in assets. The Arch Capital Group is engaged in a range of insurance and financial service activities through subsidiaries comprising its Arch Insurance Services division and the ownership of intermediaries, underwriting agencies, service providers and insurance companies.

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. (the "Company") may include forward-looking statements which reflect the Company's current views with respect to future events and financial performance. All statements other than statements of historical fact included in this release are forward-looking statements. Forward-looking statements involve the Company's current assessment of risks and uncertainties, including statements regarding the completion of the proposed acquisition, expected benefits and anticipated future financial results. Actual events and results may differ materially from those expressed or implied in these statements. In addition to risks and uncertainties related to the Company's business described in filings by the Company with the Securities Exchange Commission, the transactions described in this release are subject to various risks and uncertainties including, but not limited to, the risks that the conditions to closing will not be satisfied, as well as risks relating to the successful integration of Rock River into the Company's existing operations. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.