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A.M. BEST AFFIRMS TRANSAMERICA INSURANCE GROUP'S RATINGS

 OLDWICK, N.J., Feb. 11 /PRNewswire/ -- Effective immediately, the "A" (Excellent) Best's Rating of the Transamerica Insurance Group (property/casualty) has been affirmed in conjunction with the filing of the company's S-1 registration statement for its initial public offering (IPO). This rating affirmation follows extensive discussions over the past several months with both Transamerica Corporation and the new management team, headed by CEO-elect Jon Rotenstreich and president- elect Don Hutson, which will assume operational control of the Transamerica Insurance Group upon its IPO scheduled to occur in April 1993.
 A.M. Best is satisfied that the actions resulting from the proposed IPO and the accompanying signed definitive agreements between Transamerica Corporation, Transamerica Insurance Group and Jon Rotenstreich, will strengthen the financial position of the Transamerica Insurance Group and may eventually improve its operational profitability.
 The six key features of the process to create a "new" Transamerica Insurance Group are as follows: 1) In the fourth quarter of 1992, Transamerica Corporation contributed $142 million to the capital of Transamerica Insurance Group. In addition, $50 million of capital will be contributed into the insurance group following the offering. 2) An additional $150 million of cash will reside at the new holding company. This capital will support $31 million of debt, provide financial flexibility, and will offset up to $50 million of potential after-tax restructuring expenses. Also, the holding company will have a $50 million standby facility with Transamerica Corporation. 3) Transamerica Corporation assumed responsibility for certain discontinued lines including assumed treaty reinsurance business and certain excess liability policies. In addition, Transamerica Corporation is purchasing for cash the capital stock of Sedgewick Group for its carrying value of $200 million. Also, River Thames Insurance Company will be retained by Transamerica Corporation. 4) Loss reserves were strengthened in 1992 by approximately $258 million. 5) Transamerica Corporation will provide loss reimbursement protection for certain environmental-related claims in the form of indemnifying 75 percent of $119 million of claims in excess of Dec. 31, 1992 reserves. 6) Transamerica Corporation will provide catastrophe reimbursement for the group's Hawaii business in the form of indemnifying 90 percent of $110 million of losses in excess of the first $110 million of losses in 1993.
 In addition, the new management team plans on centralizing certain functions and consolidating operations to significantly reduce expenses, and eliminate business operations that do not offer prospects for carrying a satisfactory rate of return on invested capital.
 "We believe the IPO and the subsequent restructuring steps the new management team is committed to executing will position the new Transamerica Insurance Group as a better capitalized, more focused and, eventually, more profitable insurance organization," said John H. Snyder, senior vice president of the property/casualty division.
 This rating affirmation applies to 14 members of the Transamerica Insurance Group. Transamerica is among the 30 largest property/casualty underwriters in the United States.
 -0- 2/11/93
 /CONTACT: Jack Snyder of A.M. Best Company, 908-439-2200, ext. 5449/
 (TA)


CO: Transamerica Insurance Group ST: California IN: INS SU: RTG

PS -- NY049 -- 5716 02/11/93 12:40 EST
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Date:Feb 11, 1993
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