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KEMPER NATIONAL INSURANCE UNIT TO EXCHANGE STOCK FOR KEMPER CORPORATION INTERESTS

 LONG GROVE, Ill., March 18 /PRNewswire/ -- Kemper National Insurance Companies plans to broaden and balance its insurance and risk management services offerings through the exchange of Kemper Corporation (NYSE: KEM) common stock for National Loss Control Services Corporation (NATLSCO) and Kemper Reinsurance Company, both Kemper Corporation subsidiaries.
 The proposed transaction announced today involves exchanging approximately 17,434,000 shares of Kemper Corporation common stock held by Lumbermens Mutual Casualty Company, Kemper National's largest unit, for the stock of the two Kemper Corporation subsidiaries.
 The transaction has been approved at the board level by both companies. Both boards received separate fairness opinions from their respective investment banking firms.
 "This move fits our strategic plans to balance our participation in the primary insurance markets by deriving more revenue from strongly related and promising sectors such as reinsurance and risk management services," said Gerald L. Maatman, chairman and chief executive officer of Kemper National Insurance Companies.
 Maatman outlined these advantages of the proposed exchange for Kemper National:
 "NATLSCO will continue as a division of Kemper Risk Management Services, a general partnership currently operated jointly with Kemper Corporation. When the acquisition is effective, all revenues and income from NATLSCO will go to Kemper National, and coordination between Kemper National commercial insurance operations and NATLSCO will be further improved. Kemper National views the growth potential for risk management services as particularly promising and a natural extension of the organization's business.
 "Additional income from risk management services fees will provide a further balance for Kemper National's current concentration of workers compensation business.
 "Reinsurance markets are hungry for capacity in the wake of unprecedented catastrophic losses. Kemper Reinsurance offers Kemper National an opportunity to take advantage of this increasing demand and firming prices. While reinsurance operations must be clearly separated from primary property-casualty insurance operations, reinsurance also can be a key element in offering a broader range of services in the risk management field."
 "We were formerly united with these companies in the old Kemper Group, so in a way this is a homecoming for these business units," said Maatman. He pointed out that the business activities of the involved companies are closely aligned with those of Kemper National units.
 After the proposed transaction, Lumbermens holdings would be reduced to approximately 1,250,000 shares of Kemper Corporation common stock. Its ownership of Kemper Corporation common stock would decline from 37.9 percent to approximately 4.0 percent.
 "Viewed over the long term, our investment in Kemper Corporation has yielded excellent returns, but this transaction will provide for more diversification in the investment portfolios of our insurance operations," Maatman said.
 The transaction is subject to regulatory approvals. Closing is tentatively slated for Aug. 1, 1993.
 NATLSCO, headquartered in Long Grove, Ill., had 1992 revenues of $112.6 million. In addition to providing claim and loss prevention services, it operates an environmental sciences laboratory to serve self-insured and other commercial clients.
 Kemper Reinsurance Company, also headquartered in Long Grove, had 1992 revenues of $603.1 million. With its subsidiaries, it constitutes the 7th largest U.S. professional reinsurer.
 In another transaction announced today, units of Kemper National and Kemper Corporation have exchanged interests in a number of real estate projects that are joint ventures with a third party. The net result is that the two entities will each own 25 percent in all the projects, with the developer remaining a 50 percent partner. No cash is involved in the transaction.
 Said Maatman: "This spreads our risk over a larger portfolio of real estate investments, while giving us an opportunity to share in the upside potential of a more diverse group of properties. Another important advantage of the transaction is that it gives us more control over the day-to-day management of these various properties in which we have an interest."
 Both Kemper National and Kemper Corporation grew out of Lumbermens, which was founded in 1912 as a mutual insurer by James Scott Kemper. In 1968, Kemper Corporation began operating as a publicly held firm with interests in a variety of financial services, with Lumbermens holding a majority interest. By 1989, as a result of various transactions, Lumbermens ownership had declined to approximately 49 percent of Kemper Corporation. In that year, Lumbermens exchanged Kemper Corporation common stock for the stock of American Motorists Insurance Company, which had been a subsidiary of Kemper Corporation. This lowered Lumbermens' ownership of Kemper Corporation common stock to roughly its current level.
 Kemper National Insurance Companies consists of Lumbermens Mutual Casualty Company, its subsidiary American Motorists Insurance Company, American Motorists' subsidiary American Protection Insurance Company, and American Manufacturers Mutual Insurance Company, a mutual insurer under common management. In 1992, Kemper National had sales of $3.1 billion and year-end combined policyholders surplus of $2.1 billion.
 -0- 03/18/93
 /CONTACT: Charles F. Johanns, senior vice president of Kemper National, 708-540-2513, or home, 708-505-7586/
 (KEM)


CO: Kemper National Insurance Companies ST: Illinois IN: INS SU:

AH -- NY028 -- 7404 03/18/93 10:45 EST
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Date:Mar 18, 1993
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