The St. Paul Companies plans to transfer its ongoing reinsurance operations to a newly formed Bermuda-based reinsurer, Platinum Underwriters Holdings Ltd. Furthermore, Platinum intends to offer to the public 75.1% of its common shares, anticipated to raise approximately $1 billion in capital for its operations.At the time of the closing of the offering, Platinum will reinsure St. Paul Fire and Marine Insurance Co. and St. Paul Reinsurance Co. Ltd. for certain reinsurance contracts incepting in 2002. The St. Paul will also transfer certain renewal opportunities and related assets of The St. Paul's reinsurance operation, St. Paul Re, in exchange for a 24.9% stake in the new company, which will have 9.9% of the voting rights. The offering is expected to close in about three months, subject to regulatory approvals and market conditions.

Platinum will not reinsure the reinsurance liabilities of St. Paul Fire and Marine Insurance Co. and St. Paul Reinsurance Co. Limited relating to reinsurance contracts incepting prior to January 1, 2002. The St. Paul will retain the reserves related to those liabilities.

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