FIRST AMERICAN COMPLETES ACQUISITION OF FIVE STAR HOLDINGS, INC.
November 23, 1999, SANTA ANA, Calif.
Five Star's products and services will build upon First American's previously announced acquisition of Great Pacific Insurance Company, a nationwide provider of lender-placed insurance coverage. The addition of Five Star dramatically increases the strength of First American's rapidly growing consumer segment by adding a diverse product mix to its already substantial distribution network of title, closing and e-commerce operations.
First American also benefits from the addition of Five Star's experienced management and gains a new channel for distributing its products and services through Five Star's established network of agents.
"Although the sale of homeowners insurance is still tied, in part, to the real estate process, there are segments of that business, including renewals, that are not directly associated with real estate transaction volumes," said Parker S. Kennedy, president of First American Financial. "Over time, we expect that this business, as well as others in our consumer information and services segment, will serve to reduce volatility in our earnings and provide a broad new platform for development and growth."
"Five Star and its management could not be more enthusiastic about the opportunities presented through our combination with First American," said Dirk McNamee, president of Five Star and Great Pacific. "The process of regulatory approval and closing could not have gone more smoothly. Given First American's experience, distribution platform and financial strength, we anticipate rapid deployment of a nationwide program for homeowners' insurance, as well as selective expansion of our existing book of commercial transportation, dwelling fire, commercial restaurant and other unique niche coverages."
Five Star Holdings and its primary subsidiary Five Star Insurance Company are based in Irvine, Calif. and currently have a book of business of more than 26,500 policies. Both Five Star and Great Pacific Insurance Companies are now subsidiaries of a newly formed insurance holding company owned by First American Financial. This structure gives Five Star the ability to expand its services geographically and allows the immediate use of the nationwide licensing of Great Pacific, which currently carries an "A" rating from A.M. Best Co. Additionally, First American's group financial strength was recently upgraded to "A+" by the A.M. Best Co.
The First American Financial Corporation, based in Santa Ana, Calif., is the nation's leading provider of business information and related products and services. The corporation's three primary business segments include: title insurance; real estate information and services, which includes mortgage origination, mortgage servicing and database products and services; and consumer information and services, which provides home warranties; automotive, subprime and direct-to-consumer credit reporting; property and casualty insurance; property and automotive insurance tracking services; resident screening; pre-employment screening; lender-placed flood and hazard insurance; investment advisory; and trust and banking services. Through its family of companies, First American Financial has nearly 20,000 employees in more than 600 branch offices in the United States and abroad. Information about the company and an archive of its press releases can be found on the Internet at www.firstam.com.
Any statements in this document that look forward in time involve risks and uncertainties, including but not limited to the following: the effect of interest rate fluctuations; changes in the performance of the real estate markets; the effect of changing economic conditions; general volatility in the capital markets; the demand for and the acceptance of the company's products; changes in applicable government regulations; continued consolidation among the company's significant customers; consolidation among significant competitors: the impact of the legal proceedings commenced by the California attorney general and related litigation; the continued ability to identify businesses to be acquired; changes in the company's ability to integrate businesses with its acquires; and the contingencies associated with the Year 2000 issue. The company's actual results, performance or achievement could differ materially from those expressed in, or implied by, any forward-looking statements, and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what impact they will have on the results of operations or financial condition of the company.