Hellman in $1.1bn insurance deal

A Hellman & Friedman-led consortium, which includes the government of Singapore, has bought auto franchise insurer Universal Underwriters Group.

San Francisco-based private equity firm Hellman & Friedman has led an investor consortium in purchasing Universal Underwriters Group, a firm selling insurance and financial services to car, truck and motorcycle dealerships, as well as the automotive aftermarket sector. The transaction is valued at $1.1 billion (€857 million).

The investor group includes Universal Underwriters’ management, San Francisco investment firm Farallon Capital Management and the Government of Singapore’s private equity investment arm, GIC Special Investments. The company was purchased from global insurance and finance firm Zurich Financial Services Group

The deal is expected to close in the third quarter of 2005.

Hellman & Friedman managing director David Tunnell said the private equity firm was attracted to Universal Underwriters because the insurer serves a distinct specialty sector and has their own proprietary sales force.

Tunnell added that the deal also represented the opportunity for his firm to put more than $1 billion to work in a single proprietary transaction. 

Universal Underwriters is headquartered in Overland Park, Kansas and has 28 offices across the US, employing 1,800 people. The company was purchased by Zurich in 1982 and generated $1.5 billion in gross written premiums last year. 

Universal Underwriters is the second investment in the firm’s fifth fund. Hellman & Friedman Financial Partners V closed in July 2004 at $3.5 billion.