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Exhibit (b)(2)
ORION CAPITAL CORPORATION
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Discussion Materials Prepared For
ORION CAPITAL
CORPORATION
July 1997
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DONALDSON, LUFKIN & JENRETTE
2
INSURANCE INDUSTRY MERGER & ACQUISITION ACTIVITY(1)
1997
1994 1995 1996 YTD(2) TOTAL
---- ---- ---- ------ -----
Total Value of Transactions ($B):
Property & Casualty ................ $ 5.6 $ 6.7 $ 7.7 $ 7.1 $ 27.7
Life & Health ...................... 5.1 7.5 11.1 4.0 27.7
------ ------ ------ ------ ------
Total ............................. $ 10.7 $ 14.2 $ 18.8 $ 11.1 $ 55.4
====== ====== ====== ====== ======
Number of Transactions:
Property & Casualty ................ 18 26 30 11 85
Life & Health ...................... 19 27 20 6 72
------ ------ ------ ------ ------
Total ............................. 37 53 50 17 157
====== ====== ====== ====== ======
Average Transaction Size ($M): AVERAGE
-------
Property & Casualty................. $312.7 $256.9 $258.3 $649.7 $320.0
Life & Health....................... 267.8 279.4 555.0 767.0 385.7
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(1) Represents announced mergers and acquisitions with purchase prices
exceeding $25 million. Source: DLJ and Conning & Company.
(2) Through June 30, 1997. Does not reflect certain transactions for which
information is only available as of year end. These transactions tend to
be smaller than average.
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DONALDSON, LUFKIN & JENRETTE
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INSURANCE INDUSTRY TRANSACTION VALUATION DATA(1)
1997 AVERAGE
1994 1995 1996 YTD 1994-1996
---- ---- ---- --- ---------
Purchase Price/Earnings Multiples:
Property & Casualty ................ 15.4x 13.8x 13.4x 15.4x 14.7x
Life & Health ...................... 14.8 12.7 19.4 16.7 16.3
Purchase Price/Book Value Multiples:
Property & Casualty ................ 1.55x 1.42x 2.11x 2.28x 1.78x
Life & Health ...................... 1.83 1.46 1.61 1.33 1.63
Premium Paid(2):
Property & Casualty ................ 33.3% 45.7% 32.3% 48.9% 39.1%
Life & Health ...................... 21.3 24.7 41.8 30.4 25.7
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(1) Consists of selected mergers and acquisitions from DLJ's proprietary M&A
database.
(2) Represents premium paid to the target's public stock price four weeks
prior to announcement.
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DONALDSON, LUFKIN & JENRETTE
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[THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL]
TOTAL VALUE OF TRANSACTIONS
Property & Casualty Life & Health
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(Dollars in Billions)
1994 $5.6 $5.1
1995 $6.7 $7.5
1996 $7.7 $11.1
1997 YTD $7.1 $4.0
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DONALDSON, LUFKIN & JENRETTE
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[THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL]
NUMBER OF TRANSACTIONS
Property & Casualty Life & Health
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1994 18 19
1995 26 27
1996 30 20
1997 YTD 11 6
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DONALDSON, LUFKIN & JENRETTE
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[THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL]
AVERAGE TRANSACTION SIZE
Property & Casualty Life & Health
------------------- -------------
(Dollars in Millions)
1994 $313 $268
1995 $257 $279
1996 $258 $555
1997 YTD $650 $767
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DONALDSON, LUFKIN & JENRETTE
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PURCHASE PRICE/EARNINGS
[GRAPHIC OMITTED]
[PLOT POINTS TO COME]
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DONALDSON, LUFKIN & JENRETTE
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PURCHASE PRICE/BOOK VALUE
[GRAPHIC OMITTED]
[PLOT POINTS TO COME]
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DONALDSON, LUFKIN & JENRETTE
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[THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL]
PREMIUM PAID(1)
Property & Casualty Life & Health
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1994 33% 21%
1995 46% 25%
1996 32% 42%
1997 YTD 49% 30%
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(1) Represents premium paid to the target's public stock price four weeks
prior to announcement.
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DONALDSON, LUFKIN & JENRETTE
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SELECTED MAJOR PROPERTY & CASUALTY TRANSACTIONS
(Dollars in millions)
EQUITY PURCHASE PRICE/
EQUITY ----------------------
PURCHASE NET OP. BOOK
ANNOUNCED ACQUIROR TARGET PRICE INCOME VALUE(1)
- --------- ---------------- ------------------- -------- ------ ---------
6/97 GE Capital Corp. Colonial Penn Group $950 NA NA
6/97 GM Corp. Integon Corp. 518 NM 2.88x
6/97 Zenith National Riscorp, Inc. 35(1) NA NA
6/97 MMI Cos. Unionamerica 197 9.1x 1.66
Holdings Plc
6/97 SAFECO American States 2,800 18.4 2.31
5/97 Fremont General Industrial Indemnity 365 NA NA
5/97 Exel Ltd. GCR Holdings 645 7.7 1.51
3/97 PartnerRe Ltd. SAFR 950 12.0 1.27
3/97 Fireman's Fund Crop Growers Corp. 82 NA 2.42
1/97 GE Capital Corp. Coregis 375 NA NA
1/97 HCC Ins. Holdings AVEMCO Corp. 230 29.7 3.92
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Average $650 15.4x 2.28x
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(1) Excludes impact of SFAS No. 115.
(1) DLJ estimate.
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DONALDSON, LUFKIN & JENRETTE
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