Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

Vesta Insurance Group Forms New Agency to Acquire Certain Assets of InsureOne and Renewal Rights for Gallant and Valor Non-Standard Auto Policies

BIRMINGHAM, Ala. -- Vesta Insurance Group, Inc. continues to execute its non-standard automobile retail growth strategy with the formation of a new insurance agency and the acquisition of certain assets of InsureOne Independent Insurance Agency, Inc., a non-standard insurance agency headquartered in Chicago which operates in the Midwest, and renewal rights to the non-standard auto business of InsureOne's insurance company affiliates, Gallant Insurance Company and Valor Insurance Company. As part of the transaction, Affirmative Insurance Company, a member of the Vesta Insurance Group, has entered into an agreement to reinsure Gallant and Valor unearned premium effective January 1, 2002.

Gallant and Valor currently have in excess of $100 million in annualized non-standard automobile premium, of which $36 million was unearned as of January 1, 2002. InsureOne has more than 100 offices in Illinois, Indiana, Kansas, Wisconsin and Missouri. The transaction received approval from the Illinois Department of Insurance.

"Growth in our non-standard automobile segment is an integral piece of our corporate strategy," said James E. Tait, Chairman of Vesta. "InsureOne and Gallant and Valor agents have the market position, infrastructure, reputation and people in place to drive profitable growth throughout the Midwest and into new markets."

As part of the transaction, Vesta will form a new insurance agency which will operate under the InsureOne name. The new agency and other Vesta affiliates will acquire the infrastructure, information systems and other fixed assets of InsureOne, together with certain related assets of Gallant and Valor, for approximately $14 million in cash.

Separately, Vesta also announced that it has increased its majority ownership in its Instant Auto subsidiary to approximately 90 percent from 52 percent through the issuance of 1,500,000 shares of Vesta common stock to a minority shareholder.

The combination of these two transactions furthers Vesta's strategic goal of entering the non-standard market. Vesta management expects InsureOne to utilize Instant Auto's management and distribution expertise and to develop further synergies between InsureOne and Instant Auto under the leadership of Thomas E. Mangold.

In December 2001, Vesta completed a debt for equity swap and issued approximately 300,000 shares of common stock in exchange for $3 million face value of the Company's 8.525 percent Deferrable Capital Securities due 2027. As a result of this transaction, Vesta will eliminate approximately $255,000 in annual interest obligations.

Vesta, headquartered in Birmingham, Alabama, is a holding company for a group of insurance and financial services companies that offer a wide range of consumer-based products.

©2002 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?