Employers Direct Insurance Company Answers Critical Need for California Workers' Comp Solutions

Business Wire, Jan 6, 2003

Business Editors

GLENDALE, Calif.--(BUSINESS WIRE)--Jan. 6, 2003

Prominent insurance industry execs launch new carrier providing

exceptional service, cost controls for select group of employers

Employers Direct Insurance Company (EDIC), a new specialty California workers' compensation insurance carrier, announced today it has been licensed by the California Department of Insurance. The new company, with more than a century of combined senior management workers' compensation experience and $50 million in unencumbered capital, will immediately begin marketing to a select group of employers and trade associations in the five-county Los Angeles area.

Entering the workers' comp market during a severe crisis, EDIC offers select employers an opportunity to regain control of the cost of conducting business in California. The company is starting fresh with a focus on current and future employer needs at a time when other carriers doing business in the state are burdened with an estimated shortage of premium over costs from previous years in excess of $12 billion.

"California employers are suffering some of the biggest workers' comp premium increases in history, and the crisis is not going away soon," said EDIC Chairman and Chief Executive Officer James E. Little. "We enter the market with no backlog of open cases or liabilities from earlier years when premiums were too low. We are able to make an immediate and forceful impact by selling directly to employers who share our commitment to high-quality claims management and loss-control services."

As a new company with an experienced staff, EDIC provides these strengths:

-- Direct sales. Eliminating middlemen contributes to competitive pricing and efficient service.

-- Service commitment. EDIC's staff provides effective in-house claims and loss control management rather than outsourcing services to third-party administrators.

-- Low claims caseloads. The company keeps claims caseloads low and assigns representatives to specific employers to manage all aspects of their claims.

-- Unencumbered capital. With no backlog of open cases or liabilities from earlier years, EDIC can assure employers that its representatives will focus entirely on current and future needs.

-- Advanced technology. Equipped with the best available technology, EDIC staff enjoys freedom from legacy computer systems and other outdated tools.

-- Lean organization. An entrepreneurial culture, efficient delivery systems and communication that is flat rather than hierarchical.

Employers Direct Insurance Company was founded by James E. Little, Chairman and Chief Executive Officer, and by Ronald A. Groden, Vice Chairman and Chief Financial Officer. Jim Little has 34 years' experience in the workers' compensation industry. Ron Groden has more than 25 years of operating and finance experience in the insurance industry.

California's Workers' Comp Specialist

Employers Direct Insurance Company is entering the workers' comp market with the support of a sophisticated investment group. The lead investors are Securitas Capital and Golden Gate Capital. Securitas Capital is a private equity fund advised by Securitas Capital, LLC, an affiliate of Swiss Reinsurance Company. Golden Gate Capital of San Francisco and its principals have affiliations with Bain Capital and Bain & Company Investment banking and venture capital. EDIC principals also have made significant personal investments in the company.

Additional information can be found at www.edicwc.com.