Builds Personal Lines to Almost 20 Percent of Hub Revenue Base;
Enhances Offerings to High-Net-Worth Clients
Hub International Limited (NYSE:HBG)(TSX:HBG) announced today that Hub and The Chubb Corporation (NYSE:CB) have entered into an agreement for Hub to acquire Chubb's personal lines insurance brokerage business, Personal Lines Insurance Brokerage, Inc. (PLI). The transaction is expected to close within 60 days, subject to customary closing conditions. Terms were not announced, although Hub indicated that valuation is within its targeted range for acquisitions.
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.
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 of over 200 professionals is based in 18 offices and is licensed to handle insurance in all fifty states. Founded in 1982, the company serves approximately 44,000 clients.
The member insurers of The Chubb Group of Insurance Companies (NYSE:CB) provide property and casualty insurance for personal and commercial customers worldwide through 8,000 independent agents and brokers.
This press release may contain forward-looking statements which 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.