CHICAGO--(BUSINESS WIRE)--
Unitrin, Inc. (NYSE: UTR) reported today a net loss of $10.6 million
($0.17 per common share) for the fourth quarter of 2008, compared to net
income of $8.5 million ($0.13 per common share) for the fourth quarter
of 2007. Loss from continuing operations was $26.1 million ($0.42 per
common share) for the fourth quarter of 2008, compared to a loss from
continuing operations of $3.8 million ($0.06 per common share) for the
fourth quarter of 2007.
Unitrin reported a net loss of $29.6 million ($0.47 per common share)
for the year ended December 31, 2008, compared to net income of $205.4
million ($3.13 per common share) for the year ended December 31, 2007.
Net loss from continuing operations was $38.0 million ($0.60 per common
share) for the year ended December 31, 2008, compared to income from
continuing operations of $178.1 million ($2.71 per common share) for the
year ended December 31, 2007.
Don Southwell, Unitrin's President and Chief Executive Officer,
commented, "2008 was a difficult year for your company. We were battered
by natural catastrophes and by the economic crisis. Catastrophe losses
were $94 million after tax in 2008, compared to only $25 million after
tax in 2007. Yet, this pales in comparison to realized and unrealized
investment losses of nearly $450 million after tax in 2008. Net
investment income also declined by $50 million after tax, compared to
2007."
Mr. Southwell further commented, "Shareholders' equity declined from
$2.3 billion at the end of 2007 to $1.6 billion at the end of 2008.
Still, we have adequate capital at our subsidiaries to operate our
businesses and debt-to-total capitalization was a manageable 25.3% at
the end of 2008. We had $312 million of undrawn capacity under our
revolving credit agreement at the end of 2008. Our earliest long term
debt maturity is in late 2010. Our debt remains rated as investment
grade. We do not anticipate the need to raise either debt or equity
capital in 2009.
In addition, our fourth quarter 2008 results were driven by $60.3
million of net realized investment losses, compared to $10.5 million of
net realized investment gains in the fourth quarter of 2007. Net
investment income also declined by $35.9 million, compared to the fourth
quarter of 2007, largely due to losses from certain limited liability
investments accounted for under the equity method of accounting. In
2008, we changed our method of accounting for some of those investments
eliminating the three month lag used in past years as those partnerships
are now able to provide us with information in a more timely manner
consistent with our reporting calendar. The results for 2007 have been
adjusted for this change. Our Kemper and our Life and Health Insurance
segments both posted strong fourth quarter non-investment operating
results. Fireside Bank's loss narrowed to near break-even for the fourth
quarter, even after our writing off $9.2 million of goodwill associated
with Fireside Bank."
Total Revenues
Total revenues were $624.7 million for the fourth quarter of 2008,
compared to $709.2 million for the fourth quarter of 2007. Total
revenues were $2,742.2 million for the year ended December 31, 2008,
compared to $2,903.0 million in 2007. Total revenues decreased for both
the quarter and year due primarily to net realized investment losses,
lower net investment income and lower automobile finance revenues,
partially offset by higher earned premiums.
Earned premiums were $604.9 million and $574.3 million for the fourth
quarters of 2008 and 2007, respectively, an increase of $30.6 million.
Earned premiums increased significantly in the Unitrin Specialty
segment, with the Kemper and Life and Health Insurance segments each
posting modest increases and the Unitrin Direct segment posting a modest
decrease. Automobile finance revenues decreased by $9.1 million for the
fourth quarter of 2008, compared to the same period in 2007.
Earned premiums were $2,376.6 million and $2,286.9 million for the years
ended December 31, 2008 and 2007, respectively, an increase of $89.7
million. Earned premiums increased significantly in the Unitrin
Specialty and Unitrin Direct segments, with the Kemper and Life and
Health Insurance segments each posting modest increases. Automobile
finance revenues decreased by $17.9 million in 2008, compared to the
same period in 2007.
Net investment income decreased by $35.9 million and $77.0 million for
the quarter and year ended December 31, 2008, respectively, compared to
the same periods in 2007, due primarily to lower net investment income
from certain investments in limited liability investment companies and
limited partnerships, which the Company accounts for under the equity
method of accounting. The Company reported net investment losses of
$47.6 million and $76.3 million from these investments for the quarter
and year ended December 31, 2008, respectively, compared to a net
investment loss of $9.0 million and net investment income of $6.7
million, for the same periods in 2007. Each of the Company's insurance
segments reported lower net investment income as a result of these
investments.
Net realized investment losses were $60.3 million and $93.7 million for
the quarter and year ended December 31, 2008, respectively, compared to
net realized investment gains of $10.5 million and $62.5 million for the
same periods in 2007.
Net realized investment losses for the quarter and year ended December
31, 2008 included pretax losses of $54.0 million and $152.9 million,
respectively, resulting from other-than-temporary declines in the fair
values of investments, compared to $25.0 million and $33.0 million for
the same periods in 2007. The Company recognized net realized losses on
sales of investments of $5.5 million for the fourth quarter of 2008 and
net realized gains on sales of investments of $61.2 million for the year
ended December 31, 2008, compared to net realized gains on sales of
investments of $35.6 million and $95.0 million for the quarter and year
ended December 31, 2007, respectively. (See "Net Realized
Investment Gains (Losses)" below for additional information.) The
Company cannot anticipate when or if similar net investment gains and
losses may occur in the future.
Quarterly Segment Results
Unitrin is engaged, through its subsidiaries, in the property and
casualty insurance, life and health insurance and automobile finance
businesses. The Company conducts its continuing operations through five
operating segments: Kemper, Unitrin Specialty, Unitrin Direct, Life and
Health Insurance and Fireside Bank.
NOTE: The Company uses the registered trademark, "Kemper," under
license, for personal lines insurance only, from Lumbermens Mutual
Casualty Company ("Lumbermens"), which is not affiliated with the
Company. Lumbermens continues to use the name, "Kemper Insurance
Companies," in connection with its operations, which are distinct from,
and not to be confused with, Unitrin's Kemper business segment.
Kemper
Earned premiums in the Kemper segment increased by $4.1 million for the
fourth quarter of 2008, compared to the same period in 2007, due
primarily to higher volume and higher average premium rates on
homeowners insurance and higher volume on automobile insurance and other
personal lines insurance, partially offset by lower average premium
rates on automobile insurance.
Operating profit in the Kemper segment increased by $2.7 million for the
fourth quarter of 2008, compared to the same period in 2007, due
primarily to lower incurred losses and loss adjustment expenses "(LAE)",
partially offset by lower yields on investments. Kemper's incurred
losses and LAE decreased by $13.8 million for the fourth quarter of
2008, compared to the same period in 2007, due primarily to lower
catastrophe losses and LAE. Catastrophe losses and LAE for the fourth
quarter of 2008 included favorable development of $5.1 million from
Hurricane Ike. Incurred losses and LAE for the fourth quarter of 2007
included losses of $17.5 million from California wildfires, of which
$11.0 million was included in catastrophe losses and $6.5 million was
included in non-catastrophe losses. The Kemper segment reported a net
investment loss of $3.3 million for the fourth quarter of 2008, compared
to investment income of $9.3 million for the same period in 2007. The
change in investment income is due primarily to net investment losses
from certain investments in limited liability investment companies and
limited partnerships which the Company accounts for under the equity
method of accounting.
Unitrin Specialty
Earned premiums in the Unitrin Specialty segment increased by $20.1
million for the fourth quarter of 2008, compared to the same period in
2007, due primarily to higher volume of personal automobile insurance,
partially offset by lower volume of commercial automobile insurance.
Operating profit in the Unitrin Specialty segment decreased by $9.8
million for the fourth quarter of 2008, compared to the same period in
2007, due primarily to higher incurred losses and LAE as a percentage of
earned premiums and lower net investment income.
Unitrin Direct
Earned premiums in the Unitrin Direct segment decreased by $0.6 million
for the fourth quarter of 2008, compared to the same period in 2007. The
Unitrin Direct segment reported an operating loss of $15.9 million for
the fourth quarter of 2008 compared to an operating loss of $16.0
million for the same period of 2007. The Company is taking dramatic
steps to improve Unitrin Direct's operating results, including
aggressive rate and underwriting actions and a reduction in marketing
spending. After completing the Direct Response acquisition, the Company
intends to limit growth of the combined operation until profitability is
achieved. The combination of Unitrin Direct and Direct Response will
result in a company that has sufficient scale to turn a profit. The
Company continues to believe that Unitrin's shareholders will benefit
from this alternative distribution channel in the years to come.
Life and Health Insurance
Earned premiums in the Life and Health Insurance segment increased by
$7.0 million for the fourth quarter of 2008, compared to the same period
in 2007. Earned premiums included $12.2 million resulting from the
acquisition of Primesco, Inc. ("Primesco"). Primesco was acquired on
April 1, 2008 and its results of operations are included in the
Company's results of operations from the date of acquisition. Excluding
the impact of the Primesco acquisition, earned premiums decreased by
$5.2 million for the fourth quarter of 2008, compared to the same period
in 2007, due primarily to lower volume, partially offset by higher
average premium rates on accident and health insurance products.
Operating profit in the Life and Health Insurance segment decreased by
$6.9 million for the fourth quarter of 2008, compared to the same period
in 2007, due primarily to lower net investment income from investments
in limited liability investment companies and limited partnerships.
Operating profit in the fourth quarter of 2008 included $4.3 million
from the Primesco acquisition.
Fireside Bank
Automobile finance revenues for the fourth quarter of 2008 decreased by
$9.1 million, compared to the same period in 2007, due primarily to
lower yields on loans outstanding and lower average levels of loans
outstanding. Automobile loan originations were $70.5 million for the
fourth quarter of 2008, compared to $170.1 million for the same quarter
in 2007. Loan originations declined due primarily to Fireside Bank's
more stringent underwriting requirements and the overall decline in
automobile sales. Fireside Bank does not make loans secured by real
estate; it derives its interest income solely from automobile loans.
Fireside Bank reported operating profit of $1.9 million for the fourth
quarter of 2008, compared to an operating loss of $73.4 million for the
same period in 2007. Fireside Bank's operating results in 2008 improved
due primarily to a lower provision for loan losses. In the fourth
quarter of 2008 the Company wrote off $9.2 million of goodwill
associated with Fireside Bank. The Company is continuing the process of
exploring the strategic alternatives associated with its investment in
Fireside Bank.
Consolidated results for the three months and years ended December 31,
2008 and 2007 are as follows:
Three Months Ended Year Ended
(Dollars and Shares in Millions, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Except Per Share Amounts) 2008 2007 2008 2007
Revenues:
Earned Premiums $ 604.9 $ 574.3 $ 2,376.6 $ 2,286.9
Automobile Finance Revenues 56.7 65.8 242.3 260.2
Net Investment Income 21.9 57.8 212.9 289.9
Other Income 1.5 0.8 4.1 3.5
Net Realized Investment Gains (60.3 ) 10.5 (93.7 ) 62.5
(Losses)
Total Revenues 624.7 709.2 2,742.2 2,903.0
Expenses:
Policyholders' Benefits and
Incurred
Losses and Loss Adjustment 412.0 404.3 1,765.2 1,572.3
Expenses
Insurance Expenses 190.6 180.4 736.5 705.8
Automobile Finance Expenses 32.8 125.2 204.1 272.5
Interest Expense on Certificates 13.8 15.7 58.7 58.7
of Deposit
Goodwill 9.2 - 9.2 -
Interest and Other Expenses 12.2 14.7 58.5 66.9
Total Expenses 670.6 740.3 2,832.2 2,676.2
Income (Loss) from Continuing
Operations before
Income Taxes and Equity in Net (45.9 ) (31.1 ) (90.0 ) 226.8
Income of Investee
Income Tax Benefit (Expense) 18.3 26.8 46.2 (49.9 )
Income (Loss) from Continuing
Operations before
Equity in Net Income of Investee (27.6 ) (4.3 ) (43.8 ) 176.9
Equity in Net Income of Investee 1.5 0.5 5.8 1.2
Income (Loss) from Continuing (26.1 ) (3.8 ) (38.0 ) 178.1
Operations
Discontinued Operations:
Income from Discontinued
Operations Before Income Taxes 23.3 16.9 18.2 34.8
Income Tax Expense (7.8 ) (4.6 ) (9.8 ) (7.5 )
Income from Discontinued 15.5 12.3 8.4 27.3
Operations
Net Income (Loss) $ (10.6 ) $ 8.5 $ (29.6 ) $ 205.4
Income (Loss) Per Share from $ (0.42 ) $ (0.06 ) $ (0.60 ) $ 2.71
Continuing Operations
Income Per Share from 0.25 0.19 0.13 0.42
Discontinued Operations
Net Income (Loss) Per Share $ (0.17 ) $ 0.13 $ (0.47 ) $ 3.13
Income (Loss) Per Share from
Continuing
Operations Assuming Dilution $ (0.42 ) $ (0.06 ) $ (0.60 ) $ 2.70
Income Per Share from
Discontinued
Operations Assuming Dilution 0.25 0.19 0.13 0.42
Net Income (Loss) Per Share $ (0.17 ) $ 0.13 $ (0.47 ) $ 3.12
Assuming Dilution
Weighted Average Common Shares
Outstanding 62.1 64.4 62.7 65.6
Weighted Average Common Shares
and
Equivalent Shares Outstanding 62.1 64.7 62.7 65.9
Assuming Dilution
Dividends Paid Per Share $ 0.470 $ 0.455 $ 1.880 $ 1.820
Note: The results for 2007 have been adjusted for the
retrospective application of a change in accounting principle for the
elimination of a reporting lag for certain investments accounted for
under the equity method of accounting.
Business segment revenues for the three months and years ended December
31, 2008 and 2007 are as follows:
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in Millions) 2008 2007 2008 2007
Revenues:
Segment Revenues:
Kemper:
Earned Premiums $ 236.5 $ 232.4 $ 930.7 $ 926.3
Net Investment Income (Loss) (3.3 ) 9.3 19.1 44.0
Other Income 0.1 0.1 0.5 0.5
Total Kemper 233.3 241.8 950.3 970.8
Unitrin Specialty:
Earned Premiums 131.2 111.1 494.0 449.3
Net Investment Income (Loss) (1.5 ) 3.9 8.6 19.2
Other Income 0.1 - 0.2 0.1
Total Unitrin Specialty 129.8 115.0 502.8 468.6
Unitrin Direct:
Earned Premiums 70.9 71.5 290.5 257.6
Net Investment Income (Loss) (0.8 ) 2.3 4.6 8.9
Other Income 0.1 0.1 0.4 0.4
Total Unitrin Direct 70.2 73.9 295.5 266.9
Life and Health Insurance:
Earned Premiums 166.3 159.3 661.4 653.7
Net Investment Income 27.0 34.5 162.1 181.0
Other Income 0.2 0.5 1.1 1.2
Total Life and Health Insurance 193.5 194.3 824.6 835.9
Fireside Bank:
Automobile Finance Revenues 56.7 65.8 242.3 260.2
Net Investment Income 1.0 1.5 4.5 4.9
Total Fireside Bank 57.7 67.3 246.8 265.1
Total Segment Revenues 684.5 692.3 2,820.0 2,807.3
Unallocated Dividend Income 0.7 5.3 10.8 25.2
Net Realized Investment Gains (60.3 ) 10.5 (93.7 ) 62.5
(Losses)
Other (0.2 ) 1.1 5.1 8.0
Total Revenues $ 624.7 $ 709.2 $ 2,742.2 $ 2,903.0
Note: The results for 2007 have been adjusted for the
retrospective application of a change in accounting principle for the
elimination of a reporting lag for certain investments accounted for
under the equity method of accounting.
Business segment operating profit (loss) for the three months and years
ended December 31, 2008 and 2007 is as follows:
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in Millions) 2008 2007 2008 2007
Segment Operating Profit (Loss):
Kemper $ 20.2 $ 17.5 $ 7.6 $ 88.2
Unitrin Specialty (4.3 ) 5.5 10.2 35.3
Unitrin Direct (15.9 ) (16.0 ) (52.5 ) (41.2 )
Life and Health Insurance 19.3 26.2 79.3 150.6
Fireside Bank 1.9 (73.4 ) (25.3 ) (66.0 )
Total Segment Operating Profit 21.2 (40.2 ) 19.3 166.9
(Loss)
Unallocated Dividend Income 0.7 5.3 10.8 25.2
Net Realized Investment Gains (60.3 ) 10.5 (93.7 ) 62.5
(Losses)
Other Expense, Net (7.5 ) (6.7 ) (26.4 ) (27.8 )
Income (Loss) from Continuing
Operations before Income
Taxes and Equity in Net Income of $ (45.9 ) $ (31.1 ) $ (90.0 ) $ 226.8
Investee
Business segment net income (loss) for the three months and years ended
December 31, 2008 and 2007 is as follows:
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in Millions) 2008 2007 2008 2007
Segment Net Income (Loss):
Kemper $ 15.2 $ 14.2 $ 13.4 $ 66.5
Unitrin Specialty (2.2 ) 4.9 10.1 27.0
Unitrin Direct (9.8 ) (9.8 ) (32.0 ) (24.9 )
Life and Health Insurance 13.7 17.2 51.8 97.0
Fireside Bank (1.8 ) (43.1 ) (22.3 ) (38.8 )
Total Segment Net Income (Loss) 15.1 (16.6 ) 21.0 126.8
Net Income (Loss) From:
Unallocated Dividend Income 0.7 4.6 9.5 22.2
Net Realized Investment Gains (39.3 ) 6.8 (61.0 ) 40.5
(Losses)
Other (Expense) Income, Net (4.1 ) 0.9 (13.3 ) (12.6 )
Income (Loss) from Continuing
Operations
Before Equity in Net Income of (27.6 ) (4.3 ) (43.8 ) 176.9
Investee
Equity in Net Income of Investee 1.5 0.5 5.8 1.2
Income (Loss) from Continuing $ (26.1 ) $ (3.8 ) $ (38.0 ) $ 178.1
Operations
Note: The results for 2007 have been adjusted for the
retrospective application of a change in accounting principle for the
elimination of a reporting lag for certain investments accounted for
under the equity method of accounting.
The components of Net Realized Investment Gains (Losses) for the three
months and years ended December 31, 2008 and 2007 are as follows:
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in Millions) 2008 2007 2008 2007
Fixed Maturities:
Gains on Dispositions $ 0.2 $ 2.5 $ 4.8 $ 5.1
Losses on Dispositions (1.6 ) (0.2 ) (6.8 ) (4.0 )
Losses from Write-downs (1) (42.7 ) (9.4 ) (65.9 ) (10.4 )
Northrop Common Stock:
Gains on Dispositions 5.6 23.3 53.1 58.6
Losses on Dispositions (13.1 ) - (13.1 ) -
Other Equity Securities:
Gains on Dispositions 39.1 10.0 67.9 30.6
Losses on Dispositions (35.7 ) (4.1 ) (46.1 ) (5.1 )
Losses from Write-downs (2) (7.6 ) (15.6 ) (83.3 ) (22.6 )
Real Estate:
Gains on Dispositions - 2.9 1.5 4.8
Other:
Gains on Dispositions 0.1 1.2 0.1 5.2
Losses on Dispositions (0.1 ) - (0.2 ) (0.2 )
Losses from Write-downs (3.7 ) - (3.7 ) -
Net Trading Securities Gains (Losses) (0.8 ) (0.1 ) (2.0 ) 0.5
Net Realized Investment Gains (Losses) $ (60.3 ) $ 10.5 $ (93.7 ) $ 62.5
(1) Includes a loss of $2.3 million for the year ended December 31, 2008
to write down Lehman Brothers Holdings, Inc. ("Lehman") bonds and a loss
of $19.7 million and $33.5 million for the quarter and year ended
December 31, 2008, respectively, to write down Celerity bonds.
(2) Includes a loss of $15.4 million for the year ended December 31,
2008 to write down Federal National Mortgage Association preferred
stock, a loss of $20.2 million for the year ended December 31, 2008 to
write down Federal Home Loan Mortgage Corporation preferred stock, a
loss of $4.0 million for the year ended December 31, 2008 to write down
Lehman preferred stock, a loss of $2.3 million for both the quarter and
year ended December 31, 2008 to write down our investment in Highbridge
Capital LP and a loss of $12.5 million for the year ended December 31,
2008 to write down certain common stocks due to the change in Company's
intent to hold them until they fully recover in value.
Unitrin, Inc. and Subsidiaries
Consolidated Balance Sheets
(Dollars in millions, except per share amounts)
Dec. 31, Dec. 31,
2008 2007
Assets:
Investments:
Fixed Maturities at Fair Value (Amortized
Cost: 2008 - $4,174.4; 2007 - $3,608.9) $ 4,135.9 $ 3,686.7
Northrop Grumman Corporation Preferred Stock at Fair
Value
(Cost: 2007 - $177.5) - 258.5
Northrop Grumman Corporation Common Stock at Fair Value
(Cost: 2008 - $38.6; 2007 - $245.5) 40.3 447.5
Other Equity Securities at Fair Value
(Cost: 2008 - $216.8; 2007 - $436.5) 181.5 597.6
Investee (Intermec) at Cost Plus Cumulative
Undistributed Earnings
(Fair Value: 2008 - $168.1; 2007 - $257.1) 102.2 90.7
Short-term Investments at Cost which Approximates Fair 548.6 658.7
Value
Other 714.9 696.1
Total Investments 5,723.4 6,435.8
Cash 184.2 103.1
Automobile Loan Receivables at Cost (Fair
Value: 2008 - $1,099.6; 2007 - $1,230.3) 1,078.6 1,213.5
Other Receivables 686.5 634.8
Deferred Policy Acquisition Costs 489.2 437.4
Goodwill 334.6 314.7
Current and Deferred Income Taxes 201.4 17.2
Other Assets 120.9 109.9
Assets of Discontinued Operations - 128.0
Total Assets $ 8,818.8 $ 9,394.4
Liabilities and Shareholders' Equity:
Insurance Reserves:
Life and Health $ 2,972.6 $ 2,533.0
Property and Casualty 1,268.7 1,322.9
Total Insurance Reserves 4,241.3 3,855.9
Certificates of Deposits at Cost
(Fair Value: 2008 - $1,148.7; 2007 - $1,269.7) 1,110.8 1,274.3
Unearned Premiums 733.5 722.2
Liabilities for Income Taxes 68.2 258.7
Notes Payable at Amortized Cost (Fair Value: 2008 - 560.8 560.1
$433.9; 2007 - $550.3)
Accrued Expenses and Other Liabilities 455.6 380.9
Liabilities of Discontinued Operations - 51.3
Total Liabilities 7,170.2 7,103.4
Shareholders' Equity:
Common Stock, $0.10 par value, 100 Million Shares
Authorized;
62,314,503 Shares Issued and Outstanding at December 31,
2008 and
64,254,818 Shares Issued and Outstanding at December 31, 6.2 6.4
2007
Paid-in Capital 764.7 781.3
Retained Earnings 985.8 1,178.5
Accumulated Other Comprehensive Income (Loss) (108.1 ) 324.8
Total Shareholders' Equity 1,648.6 2,291.0
Total Liabilities and Shareholders' Equity $ 8,818.8 $ 9,394.4
Note: The balances at December 31, 2007 have been adjusted for
the retrospective application of a change in accounting principle for
the elimination of a reporting lag for certain investments accounted for
under the equity method of accounting.
This press release may contain or incorporate by reference information
that includes or is based on forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. Forward-looking statements give
expectations or forecasts of future events. The reader can identify
these statements by the fact that they do not relate strictly to
historical or current facts. They use words such as "believe(s),"
"goal(s)," "target(s)," "estimate(s)," "anticipate(s)," "forecast(s),"
"project(s)," "plan(s)," "intend(s)," "expect(s)," "might," "may" and
other words and terms of similar meaning in connection with a discussion
of future operating or financial performance. Forward-looking
statements, in particular, include statements relating to future
actions, prospective services or products, future performance or results
of current and anticipated services or products, sales efforts,
expenses, the outcome of contingencies such as legal proceedings, trends
in operations and financial results.
Any or all forward-looking statements may turn out to be wrong, and,
accordingly, readers are cautioned not to place undue reliance on such
statements, which speak only as of the date of this press release.
Forward-looking statements can be affected by inaccurate assumptions or
by known or unknown risks and uncertainties. Many such factors will be
important in determining the Company's actual future results. These
statements are based on current expectations and the current economic
environment. They involve a number of risks and uncertainties that are
difficult to predict. These statements are not guarantees of future
performance; actual results could differ materially from those expressed
or implied in the forward-looking statements.
Among the general factors that could cause actual results to differ
materially from estimated results are:
-- Changes in general economic conditions, including performance of
financial markets, interest rates, unemployment rates and fluctuating
values of particular investments held by the Company and its
subsidiaries;
-- Heightened competition, including, with respect to pricing, entry of new
competitors and the development of new products by new and existing
competitors;
-- The number and severity of insurance claims (including those associated
with catastrophe losses) and their impact on the adequacy of loss
reserves;
-- The impact of inflation on insurance claims, including, but not limited
to, the effects attributed to scarcity of resources available to rebuild
damaged structures, including labor and materials and the amount of
salvage value recovered for damaged property;
-- Orders, interpretations or other actions by regulators that impact the
reporting, adjustment and payment of claims;
-- Changes in the pricing or availability of reinsurance;
-- Changes in the financial condition of reinsurers and amounts recoverable
therefrom;
-- Changes in industry trends and significant industry developments;
-- Regulatory approval of insurance rates, policy forms, license
applications and similar matters;
-- Developments related to insurance policy claims and coverage issues
including, but not limited to, interpretations or decisions by courts or
regulators that may govern or influence insurance policy coverage issues
arising with respect to losses incurred in connection with hurricanes
and other catastrophes;
-- Governmental actions, including new laws or regulations or court
decisions interpreting existing laws and regulations or policy
provisions;
-- Adverse outcomes in litigation or other legal or regulatory proceedings
involving Unitrin or its subsidiaries or affiliates;
-- Regulatory, accounting or tax changes that may affect the cost of, or
demand for, the Company's products or services;
-- The impact of residual market assessments and assessments for insurance
industry insolvencies;
-- Changes in distribution channels, methods or costs resulting from
changes in laws or regulations, lawsuits or market forces;
-- Changes in ratings by credit rating agencies including A.M. Best Co.,
Inc.;
-- Changes in laws or regulations governing or affecting the regulatory
status of industrial banks, such as Fireside Bank, and their parent
companies, including minimum capital requirements and restrictions on
the non-financial activities and equity investments of companies that
acquire control of industrial banks;
-- Changes in the estimated rates of automobile loan receivables net
charge-off used to estimate Fireside Bank's reserve for loan losses,
including, but not limited to, the impact of changes in the value of
collateral held;
-- The failure to complete the acquisition of Direct Response Corporation
and its subsidiaries;
-- The level of success and costs expended in realizing economies of scale
and implementing significant business consolidations and technology
initiatives;
-- Increased costs and risks related to data security;
-- Absolute and relative performance of the Company's products or services;
and
-- Other risks and uncertainties described from time to time in the
Company's filings with the Securities and Exchange Commission ("SEC").
No assurances can be given that the results contemplated in any
forward-looking statements will be achieved or will be achieved in any
particular timetable. The Company assumes no obligation to publicly
correct or update any forward-looking statements as a result of events
or developments subsequent to the date of this press release. The reader
is advised, however, to consult any further disclosures the Company
makes on related subjects in filings made with the SEC.
Unitrin is a financial services company focused on creating shareholder
value by providing through its subsidiaries a diverse array of insurance
and automobile finance products and services for individuals, families
and small businesses.
Among the brands in Unitrin'sProperty and Casualty Insurance businesses
are Kemper and Unitrin Specialty which sell personal and commercial
insurance through networks of independent agents, and Unitrin Direct,
which sells automobile and homeowners insurance directly to consumers or
through employer-sponsored voluntary benefit programs. Unitrin'sLife
and Health Insurance businesses bring a high-level of personalized
service to their customers. Unitrin's automobile finance subsidiary,
Fireside Bank, specializes in automobile loans for the purchase of
pre-owned vehicles. Additional information about Unitrin is available by
visiting its website (www.unitrin.com).
Source: Unitrin, Inc.
Contact: Unitrin, Inc.
David F. Bengston at (312) 661-4930 or via e-mail at
investor.relations@unitrin.com