The Company’s specialty lines underwriting unit is a collection of niche businesses that focus on solving the unique needs of particular customer groups on a national scale. The Company provides distinct products and offers tailored coverages and services, managed by seasoned teams of market specialists.

The Company provides insurance solutions for middle-market and small businesses through products that target particular industry groups with customized coverages and services.

The Company also markets package, auto, and umbrella coverage to small businesses which typically generate annualized premiums ranging from $500 to $25,000. The Company targets 13 general industry groups as well as provides some standard commercial business that is not tied to a specific industry, which provides a highly competitive solution for select agents.

The Company’s personal lines underwriting unit provides homeowners insurance, segmented private passenger automobile and package policies sold through select independent agents.

Within its personal lines underwriting unit, the Company also provides management services for a fee to three reciprocal insurance exchanges, that it has created and capitalized by lending them money in exchange for surplus notes.

The Company’s personal lines products include:

- Automobile: consists of physical damage and liability coverage. Automobile physical damage insurance covers loss or damage to vehicles from collision, vandalism, fire, theft or other causes. Automobile liability insurance covers bodily injury of others, damage to their property and costs of legal defense resulting from a collision caused by the insured.

- Homeowners: covers losses to an insured\\\\\\\'s home, including its contents, as a result of weather, fire, theft and other causes and losses resulting from liability for acts of negligence by the insured or the insured\\\\\\\'s immediate family. The Company also offers identity theft resolution assistance and identity theft expense reimbursement coverage as part of its homeowners policies.

- Package: consists of customized combination policies offering home and automobile coverage with optional umbrella and boatowners coverage.

Total revenues increased $45.1 million, or 2%, to $1,891.8 million in the first nine months of 2006, compared to total revenues of $1,846.7 million in the first nine months of 2005.

Total expenses increased $49.8 million, or 3%, to $1,652.8 million in the first nine months of 2006, compared to total expenses of $1,603.0 million in the first nine months of 2005.