A.M. Best Places Markel Group and Terra Nova Holdings, Ltd. Ratings Under Review.

OLDWICK, N.J.--(BUSINESS WIRE)--August 17, 1999--

A.M. Best Co. has placed the financial strength, debt and preferred stock ratings of the Markel Group under review with negative implications effective immediately. The financial strength rating of Terra Nova (Bermuda) Holdings Ltd. has also been placed under review with negative implications. These rating actions follow the August 16, 1999 announcement by Markel Corporation that it has entered into an agreement to acquire Terra Nova Holdings, Ltd. for approximately $905 million in cash and stock.

The negative implications reflect the uncertainty regarding the ultimate structure of the financing and the impact it will have on financial leverage and interest coverage at the holding company level. Currently, it is expected that the consideration will consist of 60% stock and 40% cash; this allocation may vary somewhat, subject to certain maximum levels, based upon financing arrangements. Markel will also assume $175 million of Terra Nova's debt in the transaction. Although it is not contingent upon financing, A.M. Best's review of the transaction will focus on the sources of funding and pro-forma financials. Additionally, A.M. Best will review management's future business plans, including the amalgamation of the two organizations, as well as any potential growth and cross-selling opportunities. This transaction will provide the newly combined organization with greater scale and scope of business and operations in various countries worldwide. In addition, it creates a solid platform for the organization to take advantage of favorable market developments through the combination of two well capitalized entities with common underwriting and reserving philosophies. A.M. Best will complete its review of the ratings of both Markel and Terra Nova upon the conclusion of the financing structure and its discussions with management.

Markel Corp. operates as an insurer and underwriting manager through its subsidiaries, thereby serving a variety of niche markets in the United States. Terra Nova (Bermuda) Holdings, Ltd. is the holding company for five wholly-owned subsidiaries through which it underwrites a diverse array of property, casualty, aviation, and marine insurance on a worldwide basis.

The transaction, which is subject to shareholder and regulatory approvals, is expected to close in the fourth quarter of 1999 or the first quarter of 2000.

The following financial strength ratings were affected:

-- Markel Insurance Group, A; group members are:

--Essex Insurance Co.

--Evanston Insurance Co.

--Investors Insurance Co. of America

--Markel American Insurance Co.

--Markel Insurance Co.

-- Associated International Insurance Co., A-

-- Deerfield Insurance Co. (formerly the First Reinsurance Co. of

Hartford), A-

-- Terra Nova (Bermuda) Holdings, Ltd., A; group members are:

--Terra Nova Insurance Co., Ltd.

--Corifrance (Compagnie de Reassurance d'Ile De France)

--Terra Nova (Bermuda) Insurance Co., Ltd.

The following security ratings were affected:

-- Markel Corp., bbb+ rating on senior debt

-- Markel Capital Trust I, bbb rating on capital securities

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 www.ambest.com.