African American-Owned Property/Casualty Insurance Company to be Formed; California-domiciled insurer to target public entities and large corporations.

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 21, 1996--Aaron Richardson and Reliance National today announced plans to form Onyx Insurance Company (Onyx), a property and casualty insurance company.

Upon approval of its application for its certificate of authority by the California Department of Insurance, Onyx will be the only African American-owned property/casualty insurance company in the United States. The company will then offer a broad range of insurance products and services to public utilities, public entities, and Fortune 1000 corporations and their private equivalents.

Onyx will be capitalized at more than $5 million and will be jointly owned by Richardson as the majority common shareholder and Reliance National, a principal unit of Reliance Group Holdings Inc. Richardson, an African-American with a distinguished career in insurance, will serve as chairman, president, and chief executive officer of Onyx.

Onyx is being formed to insure public utilities, public entities, and corporations with commitments to purchase products and services from minority-owned business enterprises (MBEs). In the absence of minority-owned insurance companies, risk managers of public entities and large corporations have had limited options available to help them meet MBE insurance procurement goals.

"There is clearly a great opportunity for a minority-owned company with sufficient capacity to participate in the insurance programs of public entities and large corporations," said Dennis A. Busti, president and chief executive officer of Reliance National. "I'm extremely pleased that Reliance is participating in the formation of such a company."

A California-domiciled company, Onyx will focus initially on public entities and large corporations either headquartered in California or with significant operations in the state. Onyx will retain a small portion of each risk and will reinsure the remainder through Reliance National, enabling Onyx to spread its risk and quickly establish a broad customer base.

"There are more than 2,600 property/casualty insurance companies in the United States with a combined net income of over $20 billion and assets of nearly $232 billion. Yet, not one of these companies is African-American-owned," said Richardson, president and chief executive officer of Onyx.

"The formation of Onyx Insurance company is an important step toward African-American participation in the economic mainstream of America. We are extremely pleased to have Reliance National as a partner in this historic undertaking."

Reliance National writes a broad range of property/casualty and accident and health insurance throughout the United States and in selected international markets. Reliance National, a principal unit of Reliance Group Holdings Inc. (NYSE: REL), had net written premiums of approximately $865 million in 1995.

Richardson, a 29-year veteran of the insurance industry, is the founder and owner of ARISCO (Aaron Richardson Insurance Services Corp.), a San Francisco-based property/casualty insurance brokerage which he formed in 1990. Earlier in his insurance career, Richardson was intrinsic in the formation and administration of a number of successful physician-owned insurance companies and self-insurance programs for public entity hospitals. -0-

Note to Editors: Additional information may be obtained by contacting Onyx News On Demand 1-800-344-6469.

CONTACT: Onyx Insurance Company, San Francisco 

Susan Spencer, 415/986-3999

or

Reliance

Steven Rautenberg, 212/909-1247