ARGONAUT REPORTS LOSS

For the 12 months ended Dec. 31, 2000, Argonaut Group Inc. reported a consolidated net loss of $83.3 million on total revenue of $209.9 million, compared with a consolidated net loss of $15.2 million on total revenue of $164.3 million for the same period the year before. The consolidated net loss for the fourth quarter 2000 was $39.0 million on total revenue of $47.1 million, compared with a consolidated net loss of $36.9 million on total revenue of $21.5 million for the same quarter in 1999. For principal subsidiary Argonaut Insurance Co., workers’ compensation in-force premium in 2000 increased to $113 and its in-force workers’ comp premium in California decreased to 29 percent of the total in-force at Dec. 31, 2000. Argonaut Insurance indicated that significant rate increases were achieved during 2000 and continued rate increases were expected through 2001. Primarily as a result of a countrywide review of the company’s claims operation, implemented in the third quarter 2000 and concluded in December, workers’ comp loss reserves were increased by 10 percent to $448 million to reflect increased loss exposures in certain regions and product lines, particularly in California. A $10-million increase in reserves for loss adjustment expenses was also recorded in the fourth quarter to reflect the ongoing costs in handling the company’s discontinued lines. In a separate announcement, Argonaut Group revealed plans to relocate its corporate headquarters this Spring from Menlo Park, Calif., to San Antonio, Texas, as a means of cutting costs.