Deal in the Works for Specialty Underwriters' Alliance?

Specialty Underwriters' Alliance Inc. has received a letter from Hallmark Financial Services Inc. containing an unsolicited, non-binding and conditional proposal to acquire the company.

The proposal calls for each outstanding share of SUA's common stock to be converted in a share of common stock of Hallmark Financial Services Inc. at a pre-determined formula. SUA also stated that it has received a copy of the Schedule 13D filed today by Hallmark Financial Services, Inc., American Hallmark Insurance Company of Texas and Hallmark Specialty Insurance Company disclosing that group's aggregate ownership of 9.6% of the outstanding common stock of SUA and the unsolicited acquisition proposal.

SUA's Board of Directors, consistent with its fiduciary duties, and in consultation with its financial and legal advisors, is reviewing the Hallmark proposal in light of SUA's current business strategy. Following its review, the Board intends to respond as appropriate.

Specialty Underwriters' Alliance Inc., through its subsidiary SUA Insurance Company, is a specialty property and casualty insurance company that provides commercial insurance products through exclusive wholesale partner agents that serve niche groups of insureds.