RLI To Acquire Surety Company

RLI Insurance Co. announced today that it has signed an agreement to acquire Underwriters Indemnity Holdings, Inc., a Houston, TX-based provider of surety bonds for oil, gas, mining and other energy-related exposures.

The transaction is expected to become effective in the first quarter of 1999, pending the approval of both companies' boards as well as state regulatory bodies. Terms of the transaction were not disclosed.

RLI has been seeking an opportunity to expand its surety operation for some time, said president Gerald D. Stephens, CPCU. "The expertise the Underwriters Indemnity team brings in the oil and gas field offered an ideal situation for our surety line to grow in new directions. We believe that in combination with RLI, the Underwriters Indemnity team can grow to be the premier provider of specialized energy-related surety products in the country." The acquisition is anticipated to make a significant premium contribution next year, which is expected to be accretive to earnings in 1999.

Underwriters Indemnity Chairman E.H. Frank III said his organization is eager to join the RLI team. "We're ready to put our experience to work for RLI as soon as possible. RLI's improved treasury listing will open doors for us in the oil and gas field. We have tremendous confidence in the RLI culture and strategy and expect to continue to build upon our prior success in the surety market," Frank said.