CHICAGO–(BUSINESS WIRE)–April 22, 2002–Unitrin, Inc. (NYSE:UTR) announced today that its subsidiary, Trinity Universal Insurance Company, has executed a definitive agreement for its previously-announced acquisition of the personal lines property and casualty insurance business of the Kemper Insurance Companies in a cash transaction. The definitive agreement formalizes an agreement in principle that the parties reached on April 11. 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% 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 approvals by insurance regulators and other third parties and other customary closing conditions, and is expected to close during this summer.
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. Additional information about Unitrin can be found by visiting Unitrin’s web site at www.unitrin.com.
This press release contains certain forward-looking statements. Readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. These forward-looking statements are subject to risks, contingencies and uncertainties which could cause actual results to differ materially from those contemplated in such statements. In connection with the transaction described above, such risks, contingencies and uncertainties include, but are not limited to, receipt of regulatory and other third party approvals and consents which are necessary in order for the transactions described to be consummated, and the rate at which IFG policies are renewed by Unitrin’s insurance subsidiaries. No assurances can be given that the results contemplated in any of these statements will be achieved or will be achieved in any particular timetable. Unitrin assumes no obligation to release publicly any revisions to any forward-looking statements as a result of events or developments subsequent to the date of this press release.
CONTACT: Unitrin, Inc.
Eric J. Draut, 312/661-4930
After hours contact:
Stacey Brown, 312/240-2719