St. Paul Buys Commercial Renewals From Kemper

By Daniel Hays

NU Online News Service, May 12, 12:44 p.m. EDT? The St. Paul Companies in St. Paul, Minn. announced today that, for an undisclosed price, it has purchased the right to seek renewals of Kemper Insurance Companies' commercial insurance business.

The sale to The St. Paul is the latest batch of renewal rights selloffs announced by Long Grove, Ill.-based Kemper this year. The commercial segment now going to The St. Paul was the subject of negotiations that broke off last month between Kemper, Securitas Capital, LLC, Cypress Merchant Banking Partners II L.P. and Gilbert Global Partners L.P.

In January, the insurer sold The Hartford renewal rights to its group captives business and some large risk national account renewal business was dealt to Old Republic International of Chicago. Gross premiums for all the business segments being sold was said to total $1 billion.

Under latest the agreement, The St. Paul said it will have the right to seek to renewals for a broad portfolio of property-liability insurance.

A spokesperson for Kemper, Linda Kingman, said the company's major focus now is its insurance services business although it retains its Eagle insurance unit, which provides specialized workers' compensation insurance for maritime and other high hazard industries.

Pat Hirigoyen, a spokesperson for The St. Paul said the business being bought would involve significant premiums over time, and is a "really great opportunity for lines we intend to grow."

He added that a lot of the independent "agents who handle this for Kemper are our agents as well." Renewals will be done on a policyholder-by-policyholder basis and The St. Paul doesn't expect any material effect this year to the company's bottom line, but the renewals, in terms of dollars could amount to "several hundred million over time."

The lines involved include small commercial, middle market commercial, inland and ocean marine, and architects' and engineers' professional liability.

The St. Paul said it is not assuming any liabilities of Kemper or its affiliates.

Marita Zuraitis, chief executive officer-Commercial Lines at The St. Paul, said Minnesota-based company is a major provider of commercial insurance, "and the incremental business we expect to write as a result of this transaction complements our current book and deepens our relationship with our distribution partners."

Mike Miller, chief executive officer-Specialty Commercial, added, "A number of key Kemper professionals will be joining the St. Paul and will work with us to ensure a smooth transition for customers as well as agents and brokers."

Special Reports /

St. Paul Buys Commercial Renewals From Kemper

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