Direct Response Corporation to Purchase Connecticut Life & Casualty Insurance Company
7 March 2000
Direct Response Corporation to Purchase Connecticut Life & Casualty Insurance CompanyCompany Plans to Take New Acquisition National WHITE PLAINS, N.Y., March 7 Mory Katz, President and Chief Executive Officer of Direct Response Corporation (DRC), a national, direct-to-the-consumer automobile insurer, and Robert S. Weiss, Chairman & Chief Executive Officer of Weiss Financial Corporation, the owner of Connecticut Life & Casualty Insurance Company (CL&C), announced today that they have entered into an agreement for DRC to acquire CL&C. Terms of the transaction were not disclosed. In making the announcement, Mr. Katz & Mr. Weiss noted that the acquisition would provide value to both entities. The White Plains, NY headquartered Direct Response Corporation is the national holding company for a growing group of direct auto insurance companies, most notably Response Insurance. Connecticut Life & Casualty is a direct insurer writing auto and homeowners insurance in Connecticut with more than $13.0 million of in-force business. Mr. Katz stated, "We are very impressed with the team and business Bob Weiss has built. We plan on working with Bob and Ron Licata (CL&C President & Chief Operating Officer) on taking Connecticut Life & Casualty national. Together we are going to help bring to fruition Bob's vision of making CL&C a significant force in the business." Robert Weiss stated, "In many ways this move fulfills my long-held vision of making CL&C a significant player in the insurance industry. Ron Licata and I have worked together to build our company's reputation for quality and service. As we progressed we realized that additional success was limited by the constraints of our resources and capital. With DRC we found a company that shares our commitment to provide the best coverage and service possible to responsible customers. DRC brings the resources needed to help expand CL&C's products and services in Connecticut and beyond." Both parties signed a letter of intent and the acquisition is subject to approval by the Connecticut Insurance Department and completion of due diligence. Direct Response Corporation intends to maximize the complimentary business models of the two companies by expanding CL&C's insurance products into the states currently marketed to by Response Insurance, including New York, California, Florida, Illinois, Maryland and Georgia. CL&C will continue to operate under its current name and management with Mr. Weiss as chairman and chief executive officer and Mr. Licata as president and chief operating officer. It is expected that staffing in CL&C's Meriden, CT office will increase significantly as a state-by-state roll out is launched. Robert Weiss, formerly a successful independent insurance agent, formed Connecticut Life & Casualty in 1990. The company reflected his commitment to provide outstanding customer service through direct distribution. Licensed in the state of Connecticut, the company writes personal lines of business, of which auto insurance current comprises approximately 72%. At its founding it was the first domestic insurer formed in Connecticut in more than 100 years. Direct Response Corporation was initially financed in 1996 with an equity commitment of $215 million from an investor group led by Morgan Stanley Dean Witter Capital Partners, the private equity unit of Morgan Stanley Dean Witter & Co. That investment was recently augmented by an additional $97 million. Through its insurance operating subsidiaries, which includes Response Insurance, DRC provides low-cost automobile insurance directly to consumers. Response Insurance began marketing in New York State in late 1997, and has since entered California, Florida, Georgia, Illinois and Maryland. The Company operates from White Plains, New York and Suisun City, California. Response Insurance intends to expand throughout much of the U.S. over the next few years, continuing to emphasize low prices, world-class service and its friendly, memorable brand. All Response Insurance marketing initiatives feature its distinctive logo, an animated red telephone on wheels, which will now be added to CL&C materials; the tag line, Response Insurance for Responsible People(R); the toll-free number, 888-RED-PHONE; and the Company's website, http://www.ResponseInsurance.com.