A.M. Best Places Ratings of Unitrin Under Review.Business Editors/Insurance Writers OLDWICK, N.J.--(BUSINESS WIRE)--April 15, 2002 A.M. Best Co. has placed the financial strength ratings of A+ (Superior) for some of the members of Unitrin Property and Casualty Insurance Group, Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , under review with negative implications. These rating actions follow the announcement that Unitrin has reached an agreement in principal to acquire the personal lines property and casualty insurance business from the Kemper Kemper may refer to:
The negative outlook on Unitrin pre-dates the Kemper announcement and is due to Unitrin's recent downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in earnings and challenges to improve earnings to Superior standards given the competitive operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. in personal lines, rising loss costs and an expense disadvantage. The negative implications are reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of these factors and the additional strain on Unitrin's existing capital base if Kemper's entire $700 million personal lines book is ultimately assumed. Additionally, Unitrin will face infrastructure and integration issues involved in absorbing a book of business of this size. A.M. Best will monitor Unitrin's capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. as business is assumed to ensure that it is supportive of the rating level. The purchase price will be approximately $45 million, plus 1% of premiums written over a three-year period beginning January January: see month. 1, 2003. Over the same three years, Kemper will be eligible for performance bonuses if business meets certain loss ratio criteria. All liabilities for policies issued prior to closing will be retained by Kemper. Unitrin will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to premiums written for policies issued or renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. after the closing and would be liable for losses and expenses incurred from these policies. Two insurance companies, Kemper Auto & Home Insurance Company and Kemper Independence Insurance Company, will be acquired by Unitrin and are included in the purchase price. The ratings will remain under review pending the completion of this transaction--which is subject to regulatory approval that is expected during the summer--and A.M. Best's discussions with Unitrin management. The following members of the Unitrin Property and Casualty Group had their financial strength ratings of A+ (Superior) placed under review with negative implications: - Trinity Universal Insurance Company - Alpha Property & Casualty Insurance Company - Charter County Mutual Insurance Company - Charter Indemnity Company - Financial Indemnity Company - Milwaukee Casualty Insurance Company - Milwaukee Mutual Insurance Company - Milwaukee Safeguard Insurance Company - Security National Insurance Company - Trinity Lloyds Insurance Company - Trinity Universal Ins Co of KS, Inc - Union National Fire Insurance Company - Unitrin Direct Insurance Company - Valley Insurance Company - Valley Property & Casualty Insurance Co A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com . |
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