A.M. Best Places Rating of Omaha Property and Casualty Insurance Company Under Review with Developing Implications

Business Wire, Nov 4, 2004

OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength rating of A- (Excellent) of Omaha Property and Casualty Insurance Company (OPAC) (Omaha, NE) under review with developing implications.

The under review status reflects the November 1, 2004, announcement of a definitive agreement between Beazley Group plc (Beazley) and Mutual of Omaha Insurance Company (Mutual of Omaha) (Omaha, NE) regarding the sale of Mutual of Omaha's wholly-owned subsidiary, OPAC. The acquisition is part of Beazley's entrance into the U.S. admitted market. The developing implications reflect anticipated capital improvement and increased shareholder participation of Beazley, which is offset by the uncertainty regarding its business plans and strategy in the U.S. market.

Under the terms of the acquisition, The Omaha Indemnity Company (OIC), an affiliate of Mutual of Omaha, has agreed to assume all obligations of OPAC prior to its acquisition by Beazley including reinsuring OPAC's historical business on a 100% quota share basis. As security for this quota share arrangement, OIC has agreed to place a certain amount of funds in trust equal to 100 % of OPAC's gross reserves for historical business, and in the unlikely event that these funds in trust were exhausted, OIC would be required to provide additional funds to meet any further losses.

A.M. Best expects OPAC's former parent, Mutual of Omaha, to maintain an orderly exit from all property/casualty business. OPAC's rating will remain under review pending the closing of the sale, anticipated in the first quarter of 2005, as well as A.M. Best meeting with the new ownership and concluding a thorough review of the business plans.

For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc.> A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.