UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): Commission File Number
January 12, 1995 1-8233
USF&G CORPORATION
(Exact Name of Registrant as Specified in Charter)
Maryland 52-1220567
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation)
100 Light Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices)
(410) 547-3000
(Registrant's telephone number, including area code)
USF&G CORPORATION
FORM-8K
______________________
Item 5. Other Events
On January 12, 1995, USF&G Corporation ("USF&G") issued a press release
announcing the signing of a definitive agreement by which USF&G will acquire all
of the outstanding Discover Re equity for approximately $78.5 million of USF&G
common stock and options. The acquisition is subject to certain regulatory
requirements and other conditions customary for a transaction of this type. The
press release is incorporated herein by reference as Exhibit I to this form.
EXHIBIT I
January 12, 1995
FOR IMMEDIATE RELEASE
CONTACT: Kerrie Burch-DeLuca
(410) 547-3573
USF&G CORPORATION ACQUIRES DISCOVER RE TO CAPITALIZE ON GROWING ALTERNATIVE RISK
TRANSFER MARKET
USF&G Corporation (NYSE: FG) and Discover Re Managers, Inc., a company
providing insurance and related services to the alternative risk transfer
("ART") market, today announced the signing of a definitive agreement whereby
USF&G will purchase all outstanding Discover Re equity for approximately $78.5
million of USF&G common stock and options.
USF&G Chairman, President, and Chief Executive Officer Norman P.
Blake, Jr. stated: "The proposed acquisition of Discover Re is consistent with
USF&G's strategy to enhance shareholder value by leveraging its specialized
expertise in related insurance businesses. This union allows us to access the
growing, high-return, alternative risk transfer market. It also provides the
opportunity to capitalize upon USF&G's expertise in workers compensation and
excess property insurance outside its core property/casualty middle market
business. We believe USF&G's strong franchise, together with the combined
insurance expertise of both organizations, provide increased growth potential
for the new operation."
Discover Re, a private company founded in 1990, provides insurance,
excess insurance, reinsurance and related advisory services to the alternative
risk transfer marketplace. It focuses on municipalities, transportation,
education, retail and other sectors. Typically the insured customer in this
market assumes a substantial amount of its own loss exposure, primarily the
predictable, frequent losses, and transfers the less predictable, excess risks
to insurers and reinsurers such as Discover. Discover creatively structures
insurance and reinsurance programs under which it assumes a portion of the risk
for its own account and other insurers assume other portions of the risk. The
ART market is one of the fastest growing segments of the property/casualty
industry, representing over 30 percent of the commercial insurance market.
Blake continued: "The founders of Discover Re, Scott Doyle and George
Estes, are seasoned reinsurance executives who have created a successful and
flexible organization capable of pursuing the market on an opportunistic basis
to sustain attractive returns. Scott and George and their team will continue
their operations under the Discover Re name at their current location in
Farmington, Connecticut.
"Discover Re's focused operations are a good fit with USF&G's business
strategy and culture. This acquisition is consistent with our interest in
developing high-value operations, such as F&G Re and Fidelity/Surety, that
augment our core insurance operations."
USF&G Corporation, through its property/casualty and life insurance
subsidiaries, is a leading provider of insurance. Founded in Baltimore in 1896,
the company markets property/casualty insurance through approximately 3,500
independent insurance agencies. For the nine months ended September 30, 1994,
USF&G had earned premiums of $1.8 billion and shareholders equity of $1.3
billion. For the nine months ended September 30, 1994, Discover Re wrote $51.8
million of total program premium and had shareholders' equity of $44.2 million.
USF&G CORPORATION
FORM 8-K
______________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
USF&G CORPORATION
By: DAN L. HALE
Dan L. Hale
Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer
January 12, 1995
