A.M. Best Assigns "A"-Excellent- to Markel Insurance Group, Removes Gryphon, First Reinsurance of Hartford From Under Review.

OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 25, 1999--A.M. Best Co. today assigned Markel Insurance Group a Best's Group Rating of "A" (Excellent).

In addition, A.M. Best affirmed the "A-" (Excellent) ratings of Gryphon Insurance Group and The First Reinsurance Co. of Hartford and removed the ratings from under review.

This action represents affirmations of the formerly independent "A" ratings of Essex Insurance Co., Evanston Insurance Co. and Markel American Insurance Co. and upgrades of the formerly independent "A-" ratings of Markel Insurance Co. and Investors Insurance Co. of America. These actions follow the completion of Markel's tender offer for the acquisition of Gryphon.

Gryphon Insurance Group's and First Reinsurance's affirmations reflect their sound capitalization, solid liquidity and good market presence in the specialty insurance market. The ratings also are indicative of the long-term positive implications of the acquisition by the Markel Corp., which has created opportunities for management to enhance operating efficiencies and reduce costs due to the complimentary nature of the business written.

The new relationship also allows the Gryphon companies to leverage Markel's strong underwriting and loss-reserving discipline to improve future underwriting performance. In addition, the group has reduced its exposure to certain of its poorly performing books of business by either discontinuing writings or increasing reinsurance protection on these lines. The ratings of Gryphon and First Reinsurance were placed under review with developing implications on Nov. 25, 1998, following Markel Corp.'s announcement of a definitive agreement to purchase Gryphon Holdings Inc.

The rating of Markel Insurance Group is based on the consolidated operating performance and financial condition of its five member companies. The group designation is based on A.M. Best's evaluation of the individual entities' operating results and financial strength, as well as the strategic linkage and business integration between companies. It reflects A.M. Best's opinion that the companies function as one coordinated entity whose individual operations and results are integral and material to the group.

The "Excellent" rating reflects the Markel group's strong operating performance, solid capitalization, good liquidity and focus on strong fundamentals. Capitalization is further enhanced by significant economic value embedded in loss reserves that has amassed through consistently conservative reserving practices. In addition, the group is a nationally recognized E&S carrier whose strong standing in the specialty markets is evidenced by the numerous program endorsements that it receives. Markel Corp. ranks among the 75 largest publicly traded property/casualty writers in the United States.

Offsetting these positive factors are the parent holding company's financial leverage, the group's exposure to asbestos and environmental liability, catastrophe and potential Year 2000 third-party liability risks and above-average investment leverage.

Markel Corp. is a publicly traded holding company that operates as an insurer and underwriting manager serving a variety of niche markets through its various subsidiaries. The Gryphon Insurance Group members specialize in providing diverse commercial casualty coverages and difference in conditions (earthquake) insurance to small and medium-sized insureds. Members of the Gryphon Insurance Group are Associated International Insurance Co. and Calvert Insurance Co., along with the First Reinsurance Co. of Hartford, a separately rated entity.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.