WT Holdings to Buy 85% Stake in Fidelity National Financial Personal Lines Business

Fidelity National Financial Inc. will sell an 85% interest in its personal lines business to WT Holdings Inc. for $119 million under an agreement between the two companies.

WT Holdings will acquire Fidelity National Insurance Co., Fidelity National Property and Casualty Insurance Co. and FNIS Insurance Services. Fidelity National Financial, a title insurer, will retain a 15% minority ownership position in the personal lines business. FNIC, FNPAC and FNIS Insurance Services intend to continue offering the same products and services under the new ownership.

The sale price is subject to typical closing adjustments based on surplus at closing. The closing of the transaction is subject to regulatory approval and customary closing conditions and is expected during the late first quarter or early second quarter of 2012. The personal lines business sale is expected to result in an estimated $15 million pretax loss for Fidelity National Financial, the company said in a statement.

"This sale of our personal lines business makes strategic sense for our company," Fidelity National Financial Chairman William P. Foley II said in a statement. "The personal lines business carries higher earnings volatility than we are comfortable maintaining and we believe we can redeploy this capital into other uses that will generate higher returns and greater value for our shareholders."

Earlier this year, Fidelity agreed to sell its flood insurance business to WRM America Holdings LLC, a specialty lines property/casualty insurance and risk-management holding company, for $210 million (Best's News Service, July 13, 2011).

Fidelity National Financial Group currently has a Best's Financial Strength Rating of A- (Excellent).

(By Jeff Jeffrey, Washington Correspondent: jeff.jeffrey@ambest.com)