AM Best


A.M. Best Downgrades Rating of TRANSGUARD


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Analyst(s)

Devin Inskeep

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devin.inskeep@ambest.com

Michael Lagomarsino, CFA

(908) 439-2200, ext. 5810

michael.lagomarsino@ambest.com


Public Relations

Jim Peavy

(908) 439-2200, ext. 5644

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Rachelle Striegel

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rachelle.striegel@ambest.com


FOR IMMEDIATE RELEASE

OLDWICK, N.J. - AUGUST 17, 2005 12:00 AM (EDT)
A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B++ (Very Good) of TRANSGUARD INSURANCE COMPANY OF AMERICA (TRANSGUARD) (Westmont, IL). The rating will remain under review with negative implications pending TRANSGUARD's parent company, SIRVA, Inc.'s (SIRVA) [NYSE:SIR], completion of its required Securities and Exchange Commission (SEC) filings, which include Form10-K for the year-ended December 31, 2004, and quarterly reports that have not yet been filed for the first and second quarters of 2005.

The rating downgrade reflects TRANSGUARD's weakened financial position due to the limited financial flexibility of SIRVA. SIRVA's filing of its annual report on Form 10-K continues to be delayed past the deadline established by the SEC due to the discovery of accounting errors that are expected to result in a fourth quarter operating loss and the restatement of prior year financial results. SIRVA has reported material weaknesses of accounting controls largely related to its European and insurance business operations, which includes TRANSGUARD. SIRVA has also announced that it will incur significant expenses attributed to the cost of completing its internal and external audits and an ongoing SEC investigation.

As a result, TRANSGUARD's operating results have been impacted by considerable adverse loss reserve development and charges related to accounting errors that were uncovered during an internal review as part of SIRVA's implementing procedures to comply with Section 404 of the Sarbanes-Oxley Act. The impact of these losses is magnified when assessing TRANSGUARD's risk-adjusted capitalization due to the considerable premium growth that it has endured since 2000.

On March 15, 2005, SIRVA issued a press release announcing it was seeking strategic options for its insurance business that includes TRANSGUARD. A.M. Best will address the under review status of the rating should a definitive agreement be finalized with a potential buyer.

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AMB# Company Name
000327 TRANSGUARD INSURANCE COMPANY OF AMERICA