Physicians Mutual to Buy Reserve National

Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire

February 25, 2010 Thursday 04:50 PM EST

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Physicians Mutual to Buy Reserve National

Sean P Carr

OMAHA, Neb.

Physicians Mutual agreed to purchase Reserve National Insurance Co., a subsidiary of Unitrin Inc., for undisclosed terms.

The deal is subject to negotiation and execution of a definitive purchase agreement, completion of due diligence and regulatory approval. It should be completed in the second quarter of this year, Unitrin (NYSE: UTR) said.

Oklahoma City-based Reserve National specializes in the sale of accident and health insurance products and Medicare supplement insurance. In 2009, it recorded earned premiums of $127 million and net income of $3.1 million. Physicians Mutual and Physicians Life offer individual health, life and retirement insurance products.

"We believe that Reserve National is a very good fit with Physicians Mutual. While Reserve National has performed well since we purchased it in 1998, we do not have the scale in health insurance to compete effectively in the years ahead," Unitrin Chairman, President and Chief Executive Officer Don Southwell said in a statement.

Efforts to reach Omaha, Neb.-based Physicians Mutual for comment were not successful.

Physicians Mutual has a Best's Financial Strength Rating of A (Excellent). Reserve National Insurance Co. has a Best's Financial Strength Rating of A- (Excellent).

Shares of Unitrin were selling at $24.17 at the market's close on Feb. 25--down .74% from the previous close.

(By Sean P. Carr, Washington Correspondent: sean.carr@ambest.com)

February 26, 2010

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