Fortis Plans IPO of U.S. Insurance Operations

September 25, 2003

Fortis, the international insurance and financial services group based in Belgium, announced its intention to proceed with an initial public offering of shares in its US insurance operations, including Fortis, Inc., which it said are “non-core.”

A Company bulletin said the move, planned for next year, would “accelerate the development of its core activities.” It will also “provide Fortis, Inc. with the opportunity to expand its operations as appropriate, raising locally generated capital if so required.” It plans on a “gradual divestment of its entire ownership interest in Fortis, Inc., retaining flexibility over the time period that this will ultimately take to benefit from the right market conditions as they occur.”

Fortis CEO Anton van Rossum commented: “Our ambition is to become the preferred supplier of financial services to our customers providing excellent quality and customer service. We will focus our efforts and resources on further developing our Benelux based banking and insurance businesses, invigorating our customer proposition and growing the businesses where we have a competitive advantage. Based on the strengths and skills developed in our home markets we will continue to build certain businesses beyond the
Benelux borders. Given the non-core nature and the independent organization of our US insurance business, we have decided to divest these activities. By focusing on our key strengths and skills, we will continue to develop our businesses by investing in autonomous growth opportunities, value adding acquisitions and partnerships to achieve improved returns over time.”

Fortis is one of the leading global players in the financial services sector and has successfully developed and marketed the bancassurance model in Belgium, The Netherlands and other European countries. It’s had less success with it in the U.K. and the U.S., which at least partially explains the group’s decision to divest its U.S. insurance operations.

The bulletin indicated that the company planned to focus on its European and Asian operations – commercial banking, private banking, trust and asset management, investment banking, factoring and leasing, as well as individual and group life, accident and health and non-life insurance – where it sees greater growth potential.

The announcement explained that Fortis’ US insurance activities will be renamed Assurant, Inc. They have “operated as a single, standalone entity with an experienced local management team for over a decade,” specializing in health care, benefits, funeral related insurance, and through the Assurant group “auto and manufactured home dealers and retailers to provide consumers with various specialty risk management products and services, including insurance, warranties and certain membership programmes.”

The bulletin said shares in Assurant, Inc. would probably be listed on the New York Stock Exchange, and that the “timing of the initial public offering will be dependent on completion of all necessary financial and regulatory requirements, as well as prevailing market conditions.”

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