Agoura Hills, CA - May 23, 2007 - Employers Direct Corporation, parent of Employers Direct Insurance Company, California's only specialty direct writer of workers' compensation insurance, today announced its first quarter financial results.

"Our first quarter results are encouraging because we sustained our net income despite the significant rate reductions that affected premiums during the period. We attribute the results to a continued high policy renewal ratio based on our dedicated partnerships with our customers. We see the current environment as a unique opportunity to continue to add policyholders and to strengthen every level of our customer-focused services," stated James E. Little, Chairman/President & CEO of Employers Direct.

The following are highlights from the first quarter 2007 Consolidated GAAP Financial Statements:

• Net income for the first quarter of 2007 of $3.9 million compared to $4.4 million for the same period in 2006
• Shareholders' equity of $135.8 million as of March 31, 2007, an increase of 3.1% from December 31, 2006
• A combined ratio of 91.2% for the first three months of 2007
• An expense ratio for the first quarter of 2007 of 24.3%, one of the lowest in the industry and the result of the company's low-cost, direct-to-consumer model
• First quarter of 2007 revenues totaled $32.7 million as compared to $40.9 million for the first quarter of 2006 - these revenues are reflective of the California Department of Insurance approved decreases in workers' comp rates over the past 12 months of 24%
• Total assets at March 31, 2007, of $333.6 million, an increase of 3.9% ($12.5 million) from total assets at December 31, 2006
  

On April 30, 2007, in a joint announcement, Alleghany Corporation, a publicly-traded company (NYSE: Y) with $6.2 billion in assets and $2.5 billion in stockholders' equity and engaged in property and casualty insurance, entered into a definitive agreement with Employers Direct and its shareholders to purchase all outstanding shares of Employers Direct Corporation for $195 million. Upon closing of the transaction, which is estimated for the third quarter of 2007, Employers Direct will become an indirect wholly-owned subsidiary of Alleghany. The insurance operating subsidiaries of Alleghany, Capitol Transamerica Corporation and RSUI Group, Inc., are rated "A" by A.M. Best. Alleghany is currently in discussions with A.M. Best to obtain a similar rating for Employers Direct Insurance Company upon the closing of the transaction.

About EMPLOYERS DIRECT INSURANCE COMPANY
Employers Direct Insurance Company is California's only specialty direct writer of workers' compensation insurance. Founded in 2002, Employers Direct has been widely accepted by business owners throughout California as a result of providing highly competitive rates, claims services designed to fight fraud and abuse, and loss prevention services that assist employers to create safe work environments. As a newer company, Employers Direct is unburdened by legacy systems and takes advantage of the latest technology to provide its customers with 24/7 access to all policy and claims information via a secure Internet portal. Employers Direct is proud that a growing number of California's best-run privately-held companies count themselves as policyholders. Niche industries include hotels, restaurants, golf and country clubs, new car dealers, food processors, manufacturing companies, specialty supermarket chains, and retailers. Online at www.employersdirect.com.