FIRST AMERICAN ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE FIVE STAR HOLDINGS, ...
-Strengthens Consumer Services Segment With Addition Of Full-Service Insurance Company-
October 4, 1999, SANTA ANA, Calif.
Five Star, a fully integrated, full-service insurance holding company that underwrites, manages and places property/casualty insurance coverage throughout California, Arizona and Nevada through five operating divisions, will continue to operate under its current name. Five Star has received an "B+" rating from A.M. Best.
"Five Star is a very well-run company with excellent leadership," said Parker S. Kennedy, president of First American Financial. "Among other things, this acquisition represents the prospect of utilizing the nation's largest escrow and closing infrastructure to provide homeowners insurance through the real estate closing process. Five Star's diverse product mix offers a number of complementary services that will strengthen our rapidly growing Consumer Information and Services segment, allowing First American to expand its offerings while adding products that operate counter to real estate and interest rate cycles. Importantly, Five Star's growing producer network offers the opportunity to utilize another channel for distribution of First American's services."
The acquisition of Five Star is an important step in the continuing evolution of First American's strategy to expand its insurance division. The first step was the acquisition of National Information Group and its subsidiary, Great Pacific Insurance Company, which provides tracking and outsourcing services for mortgage servicers, and lender-placed insurance where there has been a determination that hazard insurance has lapsed. Great Pacific provides coverage in 46 states and is rated an "A" by A.M. Best. The combined management of Great Pacific and Five Star will utilize the existing infrastructure and databases within the First American Family of Companies to market insurance products and to provide cost-effective alternatives to its customers.
"We have been looking for a partner that will help us accelerate our growth," stated Dirk McNamee, president of Five Star. "First American has the experience and technology in place that will allow for the rapid deployment of our strategy to utilize multiple distributor networks to market and deliver the products and services of our combined entities.
Dirk McNamee, who will continue to serve as president of Five Star, has also been appointed as president of Great Pacific. Five Star, which was founded in 1985 by its chairman and chief executive officer, George McNamee, provides homeowners insurance, as well as commercial transportation, dwelling fire, nonstandard auto and commercial restaurant coverage, and today has a book of business of more than 26,500 policies.
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; insurance and automotive 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 looking 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; consolidation among the company's customers; and 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 forward looking statement, 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 so, what impact they will have on the results of operations and financial condition of the company.