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Folksamerica Acquires Esurance

10 October 2000

Folksamerica Acquires Esurance
Leading Internet-Based Provider of Personal-Lines Insurance Becomes Subsidiary
                       Of Folksamerica Holding Company

    NEW YORK, Oct. 10 Folksamerica Holding Company, Inc., a
subsidiary of White Mountains Insurance Group , announced today
that it has acquired a majority interest in Esurance Inc., a leading
Internet-based provider of personal-lines insurance. Under the agreement,
Esurance becomes a subsidiary of Folksamerica Holding Company, Inc. Financial
terms of the agreement were not disclosed.
    Esurance will remain an independent entity under the Folksamerica Holding
Company and will continue offering personal auto insurance through its online
service (http://www.esurance.com). Esurance currently sells personal auto insurance
in 24 states, which represent more than 70 percent of U.S. drivers.
    "Esurance represents a promising new direct model for the insurance
industry," said Steven Fass, CEO of Folksamerica Holding Company. "The
Internet is still an emerging distribution channel for insurance and Esurance
is a leader in this growing space. The company has one of the few
Internet-based models that delivers on the promise of technology, which is to
reduce costs and provide a convenient experience for consumers."
    Esurance is a complete quote-to-claims online insurance provider that
combines the service of an agent-based insurance company with the competitive
rates of a direct insurance provider. Esurance enables customers to get expert
advice, instant quotes, comparison quotes from other providers and immediate
coverage, but also lets them manage their policy online at their convenience.
Esurance customers can instantly add a driver or car to a policy online,
change their level of coverage, print out their policy or proof of insurance
card, or contact an insurance advisor via phone, chat or email at any time.
    "Folksamerica provides the financial stability, experience and resources
we need to take our business to the next level," said Jean-Bernard Duler,
chairman and CEO of Esurance. "This is an exciting time for the insurance
industry and we are very pleased to have the leadership of Steven Fass and his
team at Folksamerica behind us as we continue growing our business."
    Esurance currently offers personal auto insurance in 24 states, including
Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois,
Indiana, Iowa, Louisiana, Maryland, Michigan, Minnesota, Missouri, New York,
Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Virginia,
Washington and Wisconsin. Esurance is licensed to market policies in 48 states
and plans to continue expanding its business to additional states this year.
    Folksamerica commenced writing business in January 1980 as one of a host
of newly formed, foreign-owned reinsurers capitalized with minimum surplus.
While virtually all of the others floundered and failed, Folksamerica, after
some poor results in the early 80's, has prospered. In 1991, recognizing that
surplus size and critical mass would become an increasingly important business
issue, Folksamerica launched an aggressive strategy to increase the Company's
resources and capacity through the acquisition of select broker market
companies such as MONY Reinsurance (1991); Christiana General Insurance
(1996); Great Lakes Reinsurance (1997); USF Re (1999); and Risk Capital Re
(2000).

    Potential Market
    According to research from leading analyst firms, auto insurance will
account for a majority of all online insurance sales during the next several
years. In a recent report, Forrester Research projects auto insurance sales
over the Internet will reach an estimated $11.8 billion by 2004, and account
for 90 percent of the total online Property/Casualty insurance sales.