Kemper Announces Intention To Sell Businesses To New Venture

Long Grove, IL, Mar. 4 - Business Wire - The Kemper Insurance Companies today announced plans to sell certain lines of its existing businesses to a new company being capitalized by private equity funds managed by Securitas Capital, LLC, a private equity investment firm affiliated with Swiss Re; The Cypress Group L.L.C.; Gilbert Global Equity Partners; and some members of Kemper's existing management team. Under the proposed transaction, the new company, which would operate under the Kemper name, would acquire the renewal rights to certain lines of the Kemper Insurance Companies. The lines of business included in the transaction are Kemper's middle market offerings, such as workers' compensation, package, auto and umbrella in support of these lines. The transaction will also include Kemper's marine and small business accounts, professional liability business for architects and engineers, the Ohio-based GreatLand and Kemper's fidelity and ERISA bond operations. These business lines generated approximately $1 billion in gross premiums in 2002.

Published on March 4, 2003

The new company will be led by Robert Lindemann, senior vice president of Kemper and president of American Manufacturers' Mutual Insurance Company, as well as other current Kemper executives. In addition, the management teams and much of the existing staff from the lines of business included in the transaction are expected to be involved in the newly formed company. The new company is expected to be capitalized with significant equity capital and supported by appropriate reinsurance. Kemper is expected to receive $9 million (plus statutory surplus) for certain licensed insurance entities and a commission on renewals in the lines of business included in the transaction as well as other financial benefits.

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