Specialty Underwriters' Alliance Declines Offer

Specialty Underwriters' Alliance Inc. announced that the company's Board of Directors, in consultation with its financial and legal advisors, reviewed Hallmark Financial Services Inc.'s unsolicited, non-binding and conditional proposal to acquire SUAI in a stock for stock exchange that values SUAI's common stock at $6.50 per share.

After due deliberation, the SUAI Board unanimously concluded not to accept this offer, remain independent and continue with the execution of its current business strategy, which the Board believes represents a better long-term value for the company's shareholders.

This plan includes a focus on targeted specialty market niches based on the company's in-depth knowledge of these customer classes and a wholesale distribution model with its exclusive Partner Agents who are aligned with the company's interests to maximize profitability.

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.

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.

Specialty Underwriters' Alliance, American Safety Partner

Specialty Underwriters' Alliance Inc. announced that its subsidiary, SUA Insurance Company ("SUA"), has entered into a quota share arrangement with American Safety Indemnity Co. to provide general liability to companies engaged in the automobile repossession business.

Courtney Smith, president and chief executive officer of SUA, stated, "We are delighted to enter into a second arrangement with American Safety, expanding the programs where we can write accounts requiring A-rated paper. We are excited about this new program opportunity with AEON in the collateral recovery (repossession) customer segment."

Brad Isaacson, director of Program Business at American Safety Insurance Services Inc., American Safety Indemnity Co.'s administrative service provider noted, "American Safety is pleased to expand its relationship with SUA. This helps to meets our corporate diversification strategy of targeting very specific market segments and aligning ourselves with underwriting and distribution partners that provide very detailed industry expertise."