HCC To Acquire Specialty Lloyds Insurance Broker

Stephen L. Way, chairman and chief executive officer of HCC Insurance Holdings, Inc., says his firm signed a letter of intent to purchase all of the outstanding shares of PEPYS Ltd., the parent company of Rattner MacKenzie Ltd. (RML), located in London, England.

Terms of the transaction were not disclosed but will include a combination of cash and HCC shares. The transaction is expected to close by the end of January 1999.

RML is an independent Lloyds insurance broker formed in 1989 and operates primarily as a reinsurance broker in the accident, health and certain other specialty property and casualty lines of business. RML's clients include many Lloyds Underwriters, Insurance Companies, Reinsurers and Underwriting Agencies particularly in the USA and Europe. Its business is produced directly and through reinsurance intermediaries and marketed worldwide. RML's 1999 revenues are estimated at $25 million producing an estimated pre-tax profit of $14 million.

Way stated that this acquisition was part of HCC's continuing philosophy to expand its agency operations, which would further increase the company's management fee and commission income. He added that, apart from providing the company with the ability to offer increased services to its clients, reinsurers and other HCC operations, this transaction is part of HCC's commitment to ensure the longevity of the small independent Lloyd's Broker. HCC also owns approximately 18% of the Bradstock Group PLC, a London Stock Exchange listed Lloyds broker.

Barry J. Cook, who will remain managing director and chief executive officer, stated that he and his existing management team would continue to operate RML as an independent broker. Cook further added that, with the benefit of being part of a financially strong, international group like HCC, RML would be able to expand its operations into other specialty lines of business.