Liberty Mutual Group Completes Acquisition of Ohio Casualty Corporation

Business Wire, August 27, 2007

Transaction Strengthens Liberty Mutual's Long-Standing Commitment to Independent Agents; Improves Scale and Geographic Reach

BOSTON -- Liberty Mutual Group ("Liberty Mutual") today announced that its acquisition of Ohio Casualty Corporation ("Ohio Casualty") was finalized effective August 24, 2007. Liberty Mutual and Ohio Casualty jointly announced on May 7, 2007, that the companies had entered into a definitive agreement. Ohio Casualty Corporation is the holding company of The Ohio Casualty Insurance Company and five other property and casualty insurance companies, which are referred to under the marketing brand Ohio Casualty Group.

The Boards of Directors of both companies, Ohio Casualty's shareholders, and the departments of insurance for the states of Ohio and Indiana had previously approved the transaction.

Ohio Casualty will join Liberty Mutual Group's Agency Markets business unit, which consists of regional property and casualty and specialty insurance companies that distribute products and services through independent agents and brokers.

"The addition of Ohio Casualty enhances the scale and geographic diversification of our Agency Markets business unit while strengthening the overall Liberty Mutual Group," said Edmund F. Kelly, Liberty Mutual Group chairman, president and chief executive officer. "This is an excellent fit for us and further demonstrates our commitment to independent agents and their customers."

Based on 2006 results compiled by A.M. Best Company, with the addition of Ohio Casualty, Liberty Mutual Agency Markets' $7.3 billion in net written premium makes it the largest regional provider of property and casualty products distributed through independent agents in the United States. Last year Liberty Mutual Agency Markets' net written premium was $5.9 billion and Ohio Casualty's was $1.4 billion. Liberty Mutual Group's consolidated net written premium in 2006 was $20.6 billion.

"We are delighted with the addition of Ohio Casualty to Liberty Mutual Agency Markets," said Gary Gregg, president of Liberty Mutual Agency Markets. "We are today a stronger family of regional and specialty companies that remains committed to local decision-making, strong agency relationships and ease of doing business that have made us the company of choice for independent agents; and we add Ohio Casualty's talented and dedicated employees across the country to our already strong team."

Dan Carmichael, president and chief executive of Ohio Casualty, said, "I am looking forward to working with Gary to help make Ohio Casualty an important contributor to Liberty Mutual Agency Markets' continued success. This is a very exciting time for Ohio Casualty employees, agents and management." Mr. Carmichael has agreed to stay on with Liberty Mutual Agency Markets as an executive consultant to Mr. Gregg, and will focus on the successful implementation of the acquisition, business development efforts, technology and other areas.

Mr. Gregg said the acquisition of Ohio Casualty would immediately result in the following realignment of geographic regions covered by Agency Markets companies:

     America First Insurance - Arkansas, Kansas, Louisiana, Missouri
     Oklahoma and Texas

     Indiana Insurance - Illinois, Indiana, Iowa, Michigan, Minnesota,
     Nebraska, North Dakota, South Dakota and Wisconsin

     Montgomery Insurance - Alabama, Florida, Georgia, Mississippi,
     North Carolina, South Carolina and Tennessee

     Ohio Casualty - Delaware, Kentucky, Maryland, Ohio, Pennsylvania,
     Virginia, Washington, D.C., and West Virginia

     Peerless Insurance - Connecticut, Maine, Massachusetts,
     New Hampshire, New Jersey, New York, Rhode Island and Vermont

Hawkeye-Security Insurance operations will be split between America First Insurance and Indiana Insurance.

Colorado Casualty, Golden Eagle Insurance and Liberty Northwest will continue to operate in their current territories, which are:

     Colorado Casualty - Arizona, Colorado, Nevada, New Mexico, Utah
     and Wyoming

     Golden Eagle Insurance - California

     Liberty Northwest - Alaska, Idaho, Montana, Oregon and Washington

As part of the regional structure changes, the following executive appointments are effective immediately: Mr. David Lancaster has been named president and chief executive officer of Indiana Insurance, and Mr. Michael Winner has been named president and chief executive officer of Ohio Casualty.

Mr. Gregg said the specialty lines operations of Liberty Mutual Agency Markets and Ohio Casualty will be combined into the Specialty Products Group that will include Surety, Fidelity Bonds, Excess Casualty and Umbrella. This group will be led by Mr. John Busby, who has been named senior vice president and chief operating officer, Specialty Products Group.

In addition to the eight regional companies and the Specialty Products Group, Liberty Mutual Agency Markets includes two operating companies: Wausau Insurance Companies, a national commercial property and casualty insurer; and, Summit Holding Southeast, Inc., a mono-line workers compensation insurer covering Florida and nine Southeastern states.