Chubb Corporation announced that it has entered into an agreement to sell Personal Lines Insurance Brokerage, Inc. (PLI) to Chicago-based Hub International Limited. The transaction is expected to close within 60 days, subject to customary closing conditions. Terms of the transaction were not announced.
The sale of PLI will have no material impact on Chubb’s financial results, according to the company. PLI’s 2004 revenue (unaudited) was approximately $27 million. PLI, one of the nation’s leading personal lines insurance brokers, focuses on high net worth clients. It is licensed to do business in the 50 states.
The acquisition will increase Hub’s personal lines business to approximately 20 percent of consolidated revenue and make Hub one of the largest personal lines brokers in the United States. Hub is already one of the largest personal lines brokers in Canada. PLI generated 2004 revenue of approximately $27 million from its 18 offices in the United States. In the same year, Hub generated approximately $25 million in personal lines revenue in the United States and $70 million on a consolidated basis, including Canada.
“The acquisition of PLI will add great depth and talent to our personal lines practice in the United States and we are very excited by the opportunities created through the transaction,” said Martin P. Hughes, Hub International chairman and chief executive officer. “The high-net-worth individuals targeted by PLI include many of the same middle-market business owners and executives we serve in our commercial insurance operations. This is a very important market for Hub and one we can serve more fully through the acquisition.”
Jim Kane and Kathleen Zortman, who currently lead PLI management, will oversee Hub’s personal lines practice in the United States as president and chief operating officer, U.S. Personal Lines, respectively. Their leadership role will include working with all personal lines specialists at Hub’s regional offices. Kane will join Hub’s Executive Committee.
“The acquisition will create potential for margin improvement in personal lines as PLI offices are integrated with Hub’s regional operations,” Hughes added. Hub and PLI offices share overlapping regions for approximately 54 percent of PLI’s revenue base, leading to consolidation and other cost-saving opportunities. Beyond the overlapping regions, PLI has offices in Florida, Georgia, North Carolina and Texas, all areas targeted by Hub for expansion.
Was this article valuable?
Here are more articles you may enjoy.