Personal Insurance to Grow to Nearly 20 Percent of Consolidated Revenue
Hub International Limited (NYSE:HBG)(TSX:HBG) today announced completion of the previously announced purchase of Personal Lines Insurance Brokerage, Inc. (PLI) from The Chubb Corporation. The acquisition expands Hub's leadership position in personal insurance across most of the United States and grows personal lines to nearly 20 percent of Hub's consolidated revenue. The focussed initiative will be known as Hub International Personal Insurance and will be promoted as a specialty practice, both on a stand-alone basis and to supplement other Hub products and services. A strategic advertising and branding initiative, focusing on the highly affluent audience, will begin this month.
"We welcome a very talented team of employees and an attractive base of clients to Hub with this acquisition," said Martin P. Hughes, chairman and chief executive officer of Hub International. "As we integrate PLI operations within our regional hubs, we anticipate more choices for clients, new growth opportunities and significant operating efficiencies." Hughes noted that Hub and PLI offices share overlapping operations in regions where PLI currently derives approximately 53 percent of its revenue, leading to consolidation and other cost-saving opportunities.
In 2004 PLI generated approximately $27 million in revenue, while Hub's personal lines revenue totalled $25 million in the United States and $70 million on a consolidated basis, including Canada.
Hub named PLI leaders Jim Kane and Kathleen Zortman to the positions of president and chief operating officer, respectively, for Hub International Personal Insurance in the United States. Their leadership roles will include working with all personal insurance specialists at Hub's regional offices. Kane will join Hub's Executive Committee.
In conjunction with the acquisition, Hub is establishing a performance and retention incentive program for PLI employees. Under the program, PLI employees who remain with Hub for five years will receive an aggregate of approximately 134,000 restricted share units, each convertible into one Hub common share on the fifth anniversary date of the acquisition, subject to the attainment of certain revenue and profitability goals.
Headquartered in Chicago, IL, Hub International Limited is a leading North American insurance brokerage that provides a broad array of property and casualty, life and health, employee benefits, investment and risk management products and services through offices located in the United States and Canada.
PLI serves high net worth individuals with personal insurance brokerage, offering coverage options from more than 100 insurance carriers. PLI's staff is currently based in 18 offices and is licensed to handle insurance in all fifty states. Founded in 1982, the company serves approximately 44,000 clients.
This press release may contain forward-looking statements that reflect our current views with respect to future events and financial performance. These forward-looking statements relate, among other things, to our plans and objectives for future operations and are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors include, but are not limited to, risks associated with implementing our business strategies, identifying and consummating acquisitions, integrating acquired brokerages, attaining greater market share, developing and implementing effective information technology systems, recruiting and retaining qualified employees, fluctuations in the premiums charged by insurance companies with corresponding fluctuations in our premium-based revenue, any loss of services of key executives, industry consolidation, increased competition in the industry, fluctuations in the demand for insurance products, exchange rates, resolution of regulatory issues, including those related to compensation arrangements with insurance companies, the actual costs of resolution of contingent liabilities and the passage of new legislation subjecting our business to regulation in jurisdictions where we operate. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Additional information regarding these risks and other factors that could cause Hub International's actual results to differ materially from our expectations is contained in the company's filings with the Securities and Exchange Commission and the Canadian securities commissions. Except as otherwise required by federal securities laws, Hub International undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.