USI Holdings Corporation Acquires Frederick E. Penn Insurance Agency, Inc.

USI Holdings Corporation (NASDAQ: USIH) today announced
the acquisition of Needham, MA-based, Frederick E. Penn Insurance
Agency, Inc. ("Penn"). The acquisition is expected to contribute
approximately $9 million in revenue to USI on an annual basis. Terms
of the transaction were not disclosed.
   Frederick E. Penn Insurance Agency, Inc. was founded in 1949 and
is one of the leading independent property & casualty insurance
agencies in the Boston area.
   Commenting on the acquisition, David L. Eslick, Chairman,
President & CEO, USI Holdings Corporation, said, "The addition of Penn
enhances our offerings and reaffirms our commitment to our long-term
goals of cross-selling, client retention and diversification of
revenues. The Penn team adds significant resources to our current
capabilities in the New England region. I am pleased to welcome
Jonathan, Richard and their team to the USI Family."
   Jonathan B. Penn, President, Frederick E. Penn Insurance Agency,
Inc. said, "Since 1949, we have been helping our clients manage risk
and purchase insurance with some of the highest levels of service and
expertise in the industry. By joining USI, we are pleased to be able
to maintain this unprecedented level of customer service while
increasing our product offerings."
   Mark J. Smith, CEO, USI New England, added, "The completion of
this transaction demonstrates USI New England's proven ability to
deliver the USI strategy of growth organically and through
acquisitions. I am pleased to increase our depth of expertise in
property & casualty and look forward to working with Jonathan and
Richard to serve our clients and achieve our goals."
   Richard H. Penn, CEO, Frederick E. Penn Insurance Agency, Inc.
commented, "We are pleased to join USI and know that we can continue
to guarantee our clients personalized service by committed and caring
professionals. We look forward to working with Mark and the rest of
the highly respected USI New England team."
   This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," "will" or words of similar meaning and include, but are
not limited to, statements about the expected future business and
financial and operating performance of USI resulting from and
following the acquisition. These statements are based on management's
current expectations and are inherently subject to uncertainties and
changes in circumstances. Detailed information about the factors that
could cause actual results to differ materially from those described
in the forward-looking statements is contained in USI's filings with
the SEC. Some of those factors include matters analyzed in the due
diligence process, material adverse changes in the clients of the
acquired company, and substantial delay in the expected closing of the
transaction. All forward-looking statements included in this press
release are made only as of the date of this press release, and USI
does not undertake any obligation to publicly update or correct any
forward-looking statements to reflect events or circumstances that
subsequently occur or of which USI hereafter becomes aware.

   About USI Holdings Corporation

   Founded in 1994, USI is a leading distributor of insurance and
financial products and services to businesses throughout the United
States. USI is headquartered in Briarcliff Manor, NY, and operates out
of 68 offices in 18 states. Additional information about USI may be
found at www.usi.biz.