Homesite Purchases Royal Special Risks Insurance Company.

Insurer Now Serves Half of U.S. Households

BOSTON, Nov. 7 /PRNewswire/ --

Homesite Insurance announced today that it has purchased the Royal Special Risks Insurance Company, which is comprised of 40 property-casualty state licenses, from Royal & Sun Alliance, one of the world's largest insurance groups. The acquisition significantly expands Homesite's ability to underwrite and sell homeowners insurance and related coverages throughout the U.S. Terms of the transaction were not disclosed.

Homesite currently underwrites and sells homeowners and renters insurance in 20 states, serving approximately half of the households in the U.S. With the licenses acquired through this acquisition, Homesite will be able to sell its products to homeowners and renters in 44 states and D.C., an area covering 95 percent of U.S. households.

Charles Kline, Homesite's Chief Executive Officer, said, "Adding these licenses solidifies Homesite's position as a truly national insurance company - one of a handful of companies able to serve the vast majority of U.S. homeowners and renters, and the only one focused exclusively on this market. Building this kind of nationwide presence has been among Homesite's highest priorities. It significantly enhances our ability to sell through large financial institutions, such as mortgage companies, banks and other insurers seeking to offer homeowners products. Moreover, our prospects of selling over the Internet, whether through our own site, homesite.com, or through Internet partners, are greatly enhanced if we are writing in most states."

Among Homesite's strategic marketing partners is General Motors Acceptance Corporation (GMAC), the finance arm of General Motors, through whom it sells homeowners insurance to GM employees and retirees in the U.S., members of GMAC Insurance's affinity and worksite relationships, and groups targeted by GMAC Insurance direct marketing initiatives. Other marketing partners include the U.S. Postal Service, InsWeb, Homestore.com(TM), Realtor.com(R), Springstreet.com(TM), Moving.com, Rent.net, and SBLI USA among others. Homesite is a specialized insurer of homes, designed specifically to enable customers to access its products and services in any way they prefer, including 100% through the Internet. For those preferring to communicate by telephone, customer service representatives are available at 1-800-Homesite.

Homesite Group Inc. was formed in 1997 and launched in 1999, and is dedicated to providing U.S. consumers with low-priced homeowners insurance coverage and outstanding service. Homesite's insurance products are marketed through affinity groups, employers and selected service partners, as well as directly to consumers.

The equity financing for Homesite was arranged by Morgan Stanley Dean Witter Capital Partners, the private equity group of Morgan Stanley Dean Witter, the global financial services firm.