Centre Solutions Establishes On-Shore Life Insurance Presence.

HAMILTON, Bermuda--(BUSINESS WIRE)--Oct. 29, 1998--

Centre Solutions to buy Massachusetts Casualty Insurance Company

Centre Reinsurance Holdings Limited, the parent of the Centre Solutions companies, announced today that it has signed a definitive agreement with Sun Life Assurance Company of Canada (U.S.) ("Sun Life") to acquire its wholly owned subsidiary, Massachusetts Casualty Insurance Company ("Mass. Casualty"). At present, Mass. Casualty principally writes individual disability income ("IDI") insurance throughout the U.S. The sale of Mass. Casualty is contingent upon the approval of the transaction by state regulators.

Following the acquisition, Centre Solutions will treat Mass. Casualty's existing IDI business as a closed block of business that will continue to be serviced. In addition, Centre Solutions plans to provide a variety of innovative life and health insurance and reinsurance based solutions to U.S. clients.

"When we determined that individual disability insurance was not a business line that fit into Sun Life's strategic direction in the U.S., our goal was to find a suitable buyer that could absorb the Mass. Casualty business with minimum disruption to our policyholders," said Jim Prieur, Senior Vice President and General Manager for Sun Life's U.S. operations. "We found that provider in Centre Solutions."

According to Centre Solutions' CEO David Wasserman, "The purchase reflects our belief that solutions can take many forms. When we heard that Sun Life wanted to exit the business through a sale of Mass. Casualty, we worked with them to find a mutually acceptable transaction. This purchase worked for Sun Life because they wrote all of the business in a separate legal entity. For other companies, a purchase is not necessarily a viable solution and, therefore, reinsurance or some other financially oriented solution would be needed."

"We see this transaction as part of a larger strategy of acquiring books of business that can, with active management and the ability to take risk, be serviced efficiently," said Frank Pierson, Chief Technical Officer of Centre Solutions. "In addition, we believe that more and more companies will realize that previously desirable business units are no longer strategic or core businesses. This reappraisal will come from increased competitive pressures, mergers and acquisitions and demutualization activity." Mr. Pierson will become Chief Executive Officer of Mass. Casualty after the purchase.

As part of the acquisition, the servicing of Mass. Casualty's IDI business will be managed by Disability Management Services, a Centre Solutions affiliate and an experienced third party disability claims administrator. In addition to this transaction, Centre Solutions has entered into other similar arrangements covering IDI, and property & casualty insurance including asbestos & environmental liabilities.

"This is a win-win scenario for Sun Life and us," said Centre Solutions Senior Vice President Eileen Sweeney, who will become President of Mass. Casualty following the acquisition. "Sun Life is able to meet its strategic goals while Centre Solutions acquires an on-shore presence that will serve as a platform for future opportunities in the life and health field."

"While Sun Life has valued the Mass. Casualty business, we are pleased that the organization we are selling the business to has a respected, established presence in the financial services marketplace," said James McNulty, President of Mass. Casualty.

Centre Solutions, a member of Zurich Financial Services, is a full-service provider of customized insurance, reinsurance, structured finance and risk management programs. Centre Solutions has offices in Bermuda, Dublin, Hong Kong, London, New York, San Francisco, Sydney and Zurich. Centre Solutions reported $2.2 billion of capital and surplus, and $7.8 billion of total assets as of year-end 1997, with total revenues of $2.1 billion in the year ended December 31, 1997. The Centre Solutions group of companies is rated "A" or "Excellent" by A.M. Best Company and "AA" or "Excellent" by Standard & Poor's Corporation for its claims-paying ability.

The Zurich Financial Services Group is one of the global leaders in the financial services industry, providing its customers with products and solutions in the area of financial protection and asset accumulation. The Group is concentrating its activities in four core businesses: non-life and life insurance, reinsurance and asset management. Headquartered in Zurich, Switzerland, Zurich Financial Services' worldwide presence builds on strong positions in its three home markets; the United States, the United Kingdom and Switzerland. With offices in some 60 countries, Zurich Financial Services reaches over 30 million customers and employs more than 68,000 people. Based on pro-forma consolidated figures for 1997, the Group achieved gross premiums of more than US$ 44 billion and net income of US$ 2.1 billion.

Headquartered in Boston, Mass. Casualty has served the individual disability insurance needs of its clients since 1926. Sun Life purchased the company in 1987.

Sun Life Assurance Company of Canada (U.S.) is a subsidiary of Sun Life of Canada, a multinational financial institution with total worldwide assets under management of more than $100 billion. In the U.S. Sun Life heads a broad-based network of financial service companies, including Massachusetts Financial Services, selling a wide range of financial products and services.