Liberty Mutual Group to Acquire ALM Services, Inc. From Factory Mutual; Company Forms LMG Property To Underwrite And Service Commercial Property Insurance.

BOSTON--(BUSINESS WIRE)--Nov. 5, 1999--

Liberty Mutual Group today announced that it has agreed in principle to acquire ALM Services, Inc. of Waltham, Mass., a subsidiary of Factory Mutual Insurance Company (commonly known as FM Global). Liberty Mutual and the former Arkwright Mutual Insurance Company created ALM in 1997, when they formed a strategic alliance to underwrite and service commercial property insurance. Arkwright Mutual subsequently was merged into FM Global.

Liberty Mutual, which expects to complete its acquisition of ALM by the end of November, did not release financial terms of the agreement. The ALM operations will join Liberty Mutual's Specialty Risks business unit, which also underwrites and services commercial property insurance under the Liberty Mutual and Wausau brand names. Liberty Mutual has named its combined property operations LMG Property.

"ALM helps strengthen our position in commercial property risk management and insurance services," said Gary R. Gregg, Liberty Mutual executive vice president and manager of commercial insurance operations.

"With Liberty Mutual, ALM and Wausau, LMG Property is combining three exceptional operations to deliver essential property underwriting, claims and loss prevention engineering services to all segments of the commercial marketplace," Mr. Gregg added.

According to Scott R. Goodby, Liberty Mutual executive vice president and manager of Specialty Risks, the commercial property marketplace requires flexibility, a broad array of policy forms and the capacity to cover risks anywhere in the world. "Our new operation combines the delivery of large, financially sound capacity with loss prevention engineering and research expertise," said Mr. Goodby. "We intend to help customers create safer work environments by identifying, quantifying and managing risks that can threaten their operations and profitability."

Commercial property buyers can access tailored coverage and services from LMG Property either through a broker or directly from a Liberty Mutual representative. LMG Property will combine ALM's highly regarded property engineering and loss prevention operations with Wausau's Highly Protected Risk expertise. These services will be supported by the Liberty Mutual Group Research Center for Safety and Health and a dedicated fire testing and training laboratory.

Liberty Mutual has appointed Roy Mahlstedt, who previously led ALM, to direct the operations of LMG Property. Mr. Mahlstedt will report to Mr. Goodby.

Boston-based Liberty Mutual Group is a diversified international financial services group of companies and one of the largest multi-line insurers in the property and casualty industry. The Group has more than $50 billion in consolidated assets, more than $61 billion in assets under management, $13 billion in consolidated revenue, and ranks 124th among the Fortune 500 largest corporations in the United States. Liberty Mutual is rated A+ ("Superior") by A.M. Best. The company, which is recognized as a world leader in occupational health and safety services, employs 37,000 people in more than 900 offices throughout the world.

Liberty Mutual Group's insurance products and services are provided by such well-known brand name companies as Liberty Mutual, Wausau Insurance, Peerless Insurance Companies and Indiana Insurance Companies.

In addition to its commercial property products and services, the Liberty Mutual Group is the leading provider of workers compensation insurance, programs and services in the United States. It also offers a wide range of products and services; including group life and disability; general liability, commercial auto; private passenger auto and homeowners insurance; individual life and annuities; international programs; and financial services.