Zurich Sells Auto Dealer Unit For $1.1 B

By Michael Ha

NU Online News Service, April 4, 3:30 p.m. EDT?Zurich Financial Services Group disclosed today it has sold its auto dealership insurance unit for $1.1 billion to a private investment group as part of its ongoing strategy to streamline Zurich's core commercial businesses.[@@]

Zurich said it signed a stock purchase agreement to sell its wholly-owned Universal Underwriters Group to an investor group led by Hellman & Friedman LLC, a San Francisco-based private equity investment group.

The Universal Underwriters Group, based in Overland Park, Kan., is a major provider of property-casualty insurance to U.S.-franchised automotive dealerships, with a 40 percent market share. The business was founded in 1922 and was bought by Zurich in 1982. It reported $1.5 billion in gross written premiums and fees for full-year 2004.

But despite its significant business volume, Universal Underwriters Group is no longer a good fit for Zurich Financial Services, the company announced. Zurich Chief Executive James Schiro said in a statement that Universal Underwriters' business model is "no longer in line with our unified operating model and brand for Zurich's North American Commercial businesses."

"The transaction provides Zurich with an attractive price and allows us to focus our resources and attention on our core markets and businesses," Mr. Schiro said.

Zurich North America spokesman Keith Owens further explained that within North America, the company's business model is for its commercial insurances to be marketed under a single "Zurich" brand.

Universal Underwriters, however, has maintained its own brand in the marketplace. Further, the unit has its own dedicated employee sales force, whereas the rest of Zurich North America goes through agents and brokers, Mr. Owens said.

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Zurich Sells Auto Dealer Unit For $1.1 B

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