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

Unitrin to Acquire Kemper's Personal Lines Insurance Businesses

Unitrin, Inc. has announced that its subsidiary, Trinity Universal Insurance Company, has reached an agreement in principle to acquire the personal lines property and casualty insurance business of the Kemper Insurance Companies in a cash transaction. Kemper's Individual and Family Group business unit ("IFG") specializes in the sale of personal automobile and homeowners' insurance through independent agents.

Trinity will purchase the assets of the IFG unit but all pre-closing liabilities of IFG, including policy reserves and unearned premium reserves, will remain with Kemper. Unitrin will also acquire the stock of Kemper's direct distribution personal lines subsidiaries, which sell personal automobile insurance to consumers over the Internet.

The purchase price will be approximately $45 million, plus 1 percent of premiums written over a three-year period beginning January 1, 2003. As further consideration, Kemper will be eligible for performance bonuses if the business meets certain loss ratio criteria over the same three years. Kemper will retain all liabilities for policies issued prior to the closing, while Trinity will be entitled to premiums written for substantially all policies issued or renewed after the closing and would be liable for losses and expenses incurred thereon. Kemper's personal lines net written premiums were approximately $700 million in 2001. In addition, Trinity will administer on behalf of Kemper all policies issued prior to the closing.

The transaction is subject to the execution of definitive agreements, approvals by insurance regulators and other third parties and other customary closing conditions, and is expected to close during this summer.

Richard C. Vie, Unitrin's Chairman and Chief Executive Officer said, "We are extremely pleased at the prospect of IFG joining the Unitrin family of companies. Together, we will have greater reach and size in an industry where economies of scale are increasingly important."

Donald G. Southwell, Unitrin's President and Chief Operating Officer, commented, "This acquisition underscores our commitment to personal lines sold through independent agents. We value the management team, employees, technology and agent relationships of Kemper's personal lines operation and believe it has excellent prospects for future growth and profitability."

Dale S. Hammond, President of the IFG unit, said, "We remain committed to our agents and policyholders. Unitrin is serious about growing its personal lines presence and will allow us to proceed with our technology-centered business strategy that our agents have strongly endorsed. We remain committed to providing the same level of customer service and claim response that our policyholders have come to expect."

Unitrin's subsidiaries are engaged in three businesses: property and casualty insurance, life and health insurance and consumer finance. Unitrin has in excess of $7 billion in assets, nearly 7,700 employees and had consolidated revenues in 2001 of more than $2.5 billion.

©2002 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?