SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F0RM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported) May 1, 2003
Unitrin, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
One East Wacker Drive, Chicago, Illinois 60601
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(Address of principal executive offices) (Zip Code)
0-18298 95-4255452
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(Commission File Number) (I.R.S. Employer Identification No.)
(312) 661-4600
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
In its Quarterly Report on Form 10-Q for the quarter ended March 31, 2003,
(the "Previous Disclosures"), Unitrin described its June 2002 acquisition of
the personal lines property and casualty insurance business of the Kemper
Insurance Companies ("KIC"), including the fact that Unitrin continues to rely
on KIC to write new policies and renew existing policies on Unitrin's behalf
until Unitrin's insurance subsidiaries have obtained all insurance regulatory
authorizations and have completed certain computer and data processing
modifications necessary to allow the migration of such policies to such
subsidiaries.
In the Previous Disclosures, Unitrin reported that A.M. Best & Co., the
principal insurance company rating agency, had lowered its rating for KIC from
"A-" (excellent) to "B+" (very good) in December 2002 and from "B+" to "B"
(fair) in March 2003. On May 1, 2003, A.M. Best announced that it has further
downgraded KIC from "B" to "C++" (Marginal), with a negative rating outlook.
A.M. Best attributed the downgrade to KIC's "marginal capitalization, weak
cash flows and reduced overall liquidity position." As indicated in the
Previous Disclosures, while these ratings actions have not had an impact on
Unitrin's property and casualty insurance subsidiaries' "A" (excellent) rating
from A.M. Best, such actions may adversely impact the willingness of
independent agents to renew their customers' insurance policies with KIC, even
though they are reinsured by Unitrin's subsidiary, Trinity Universal Insurance
Company. In particular, homeowners' insurance is ratings-sensitive due to
minimum rating standards imposed by some residential mortgage lenders. Should
KIC suffer further downgrades, these effects could be magnified.
This Report on Form 8-K contains forward-looking statements, which usually
include words such as "believe(s)," "goal(s)," "target(s)," "estimate(s),"
"anticipate(s)," "forecast(s)," "plan(s)," "intend(s)," "expect(s)," and
similar expressions. Readers are cautioned not to place undue reliance on such
statements, which speak only as of the date of this Report. Forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from those contemplated in such statements. Such
risks and uncertainties include, but are not limited to, changes in economic
factors (such as interest rates, unemployment rates and stock market
fluctuations), changes in competitive conditions (including availability of
labor with required technical or other skills), the number and severity of
insurance claims (including those associated with catastrophe losses),
regulatory approval of certain insurance premium rates, policy terms, license
applications and similar matters, governmental actions (including new laws or
regulations or court decisions interpreting existing laws and regulations),
adverse judgments in litigation to which the Company or its subsidiaries are
parties, realization of the economies of scale, and the successful migration
of the Kemper Auto and Home business. 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. Unitrin assumes no obligation to
release publicly any revisions to any forward-looking statements as a result
of events or developments subsequent to the date of this Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Unitrin, Inc.
Date: May 5, 2003 /s/ Eric J. Draut
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Eric J. Draut
Executive Vice President and
Chief Financial Officer