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Zurich Financial Services Group (Zurich) and affiliates of Hellman & Friedman LLC (H&F), a leading private equity investment firm, jointly announced that they have agreed not to proceed with the sale of Zurich’s wholly owned Universal Underwriters Group to an investor group led by H&F.
Zurich’s bulletin said: “Since the announcement of the agreement last April, both parties have been working toward completion of the transaction. Although both parties held constructive discussions, they were unable to complete the transaction at mutually agreeable terms. Consequently, both parties have agreed not to pursue the transaction and Zurich has decided to retain Universal Underwriters as part of its North America Commercial (NAC) business division.”
Zurich then announced that it has appointed Thomas A. Bradley, currently NAC CFO and Interim Head of Universal Underwriters, as President of the operation, effective immediately.
NAC CEO Axel P. Lehmann commented: “We have been impressed with the professionalism of H&F throughout this process. I am pleased that Tom has agreed to a new role with Universal Underwriters. In the past six months he has achieved much progress in further enforcing compliance with regulatory standards and providing value to our customers. I expect him to quickly align this profitable unit with our North America Commercial business division.”
H&C’s Managing Director David Tunnell added that “not pursuing the transaction is in the interest of both parties, and we respect Zurich’s decision to keep Universal Underwriters as part of its North American business.”
Without giving further details the bulletin explained that the “decision follows the identification of regulatory matters specific to Universal Underwriters, which surfaced during a routine market conduct examination performed by the Kansas Department of Insurance. In cooperation with the Kansas Department of Insurance, Universal Underwriters has put into place a comprehensive remediation plan and it has made substantial progress in implementing this plan.”
Universal Underwriters is headquartered in Overland Park, Kansas. It provides specialized insurance and financial services to franchised auto, truck, equipment and motorcycle dealers and the automotive aftermarket in the United States.
Zurich said the unit generated gross written premiums and fees of $1.5 billion for the fiscal year ended December 31, 2004, and achieved a return on capital “in excess of the Group’s internal hurdle rate.”