Unitrin to sell Reserve National Insurance to Physicians Mutual

Unitrin, Inc. (NYSE: UTR) today announced that it has reached an agreement in principle to sell its health insurance subsidiary, Reserve National Insurance Company, to Physicians Mutual®. The transaction is subject to negotiation and execution of a definitive purchase agreement, completion of due diligence and regulatory approval. The transaction is expected to be completed in the second quarter of 2010. Terms of the transaction were not announced.

“We believe that Reserve National is a very good fit with Physicians Mutual. While Reserve National has performed well since we purchased it in 1998, we do not have the scale in health insurance to compete effectively in the years ahead.”

Reserve National, based in Oklahoma City, specializes in the sale of accident and health insurance products and Medicare Supplement insurance. Reserve National recorded earned premiums of $127 million and net income of $3.1 million in 2009. Unitrin expects to record a gain upon completion of the transaction.

Founded in 1902, Physicians Mutual is headquartered in Omaha, Nebraska. Physicians Mutual and Physicians Life, a member of the Physicians Mutual family, offer individual health, life and retirement insurance products.

Don Southwell, Unitrin’s Chairman, President and Chief Executive Officer commented, “We believe that Reserve National is a very good fit with Physicians Mutual. While Reserve National has performed well since we purchased it in 1998, we do not have the scale in health insurance to compete effectively in the years ahead.”