Hermitage Investment Holdings Ltd. has announced that it has entered into a definitive agreement to acquire all of the share equity in two US based insurance operations, Hermitage Insurance Company and Kodiak Insurance Company, Inc. (collectively the Hermitage Companies).

The transaction is expected to close in the second half of this year subject to regulatory approvals. Hermitage Investment Holdings is a newly formed insurance holding company, incorporated in the British Virgin Islands and controlled by Thomas Gleeson and Brad Huntington of Bermuda.

Mr. Gleeson and Mr. Huntington have experience in the management and operations of insurance and reinsurance companies worldwide through the company the two cofounded, the Imagine Group, a group with over $700 million in assets. The Imagine Group is a separate entity from Hermitage Investment Holdings.

Mr. Gleeson said yesterday that the investment in the companies was an opportunistic purchase that is clearly within the overall scope of their investment intentions in insurance and reinsurance. "It is consistent with our experience and where we have invested in the past," he said.

The intention of the acquisition is that the existing management team of The Hermitage Companies and their product lines, namely property casualty and speciality lines in the domestic US market, will remain. In excess of 40 people are employed by the Hermitage Companies.

Commenting on the transaction, Mr. Gleeson said: "The Hermitage Companies were formally owned within the financially troubled Queensway Insurance Group and the completion of the acquisition will eliminate the uncertainties related to the previous ownership and should significantly improve the ratings outlook for the companies in the present market environment."