SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - May 15, 1998
HSB GROUP, INC.
(Exact name of registrant as specified in its charter)
Connecticut 001-13135 06-1475343
(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) Identification No.)
One State Street, Hartford, Connecticut 06102-5024
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (860-722-1866)
<PAGE>
Item 5. Other Events
On May 15, 1998, HSB Group Inc. (the Company) issued a press release announcing
the signing of a letter of intent for The Hartford Steam Boiler Inspection and
Insurance Company, the Company's subsidiary, to acquire Kemper Insurance
Companies' monoline boiler and machinery business and to reinsure boiler and
machinery coverage written as part of Kemper's commercial package policies.
Included herewith as Exhibit 99 is the Company's press release related to this
announcement and such information is incorporated herein by reference.
Item 7. Exhibits.
99. The Company's press release dated May 15, 1998.
-2-
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSB GROUP, INC.
Dated: May 18, 1998 /s/ R. Kevin Price
R. Kevin Price
Senior Vice President and
Corporate Secretary
-3-
Exhibit 99
MEDIA CONTACTS:
For HSB: Dennis Milewski (860) 722-5567
For Kemper: Patrick J. Gould (847) 320-3422
FOR IMMEDIATE RELEASE
KEMPER INSURANCE AND HARTFORD STEAM BOILER AGREE IN PRINCIPLE TO BOILER AND
MACHINERY ARRANGEMENT
HARTFORD, Conn., and LONG GROVE, Ill., May 15, 1998 -- The Hartford Steam Boiler
Inspection and Insurance Company (HSB) and Kemper Insurance Companies announced
today that they have signed a letter of intent for HSB to acquire Kemper's
monoline boiler and machinery business and to reinsure boiler and machinery
coverage written as part of Kemper's commercial package policies. In 1997,
Kemper reported equipment breakdown premiums of $79.4 million. It is anticipated
the arrangement will be effective on or about July 1, 1998. The purchase price
was not disclosed.
Under the anticipated arrangements, HSB will assume responsibility for providing
jurisdictional inspections, loss prevention and claim services to Kemper's
boiler and machinery insureds.
In addition, HSB will purchase Kemper's ASME inspection service business. This
fee-based engineering service certifies that boilers and pressure vessels are
manufactured in compliance with codes and standards of the American Society of
Mechanical Engineers. Kemper reported receiving $7.5 million in engineering
service fees for such inspections in 1997.
HSB anticipates offering employment to the Kemper employees who underwrite
equipment breakdown business or provide related loss prevention and inspection
service.
"We selected Hartford Steam Boiler as a partner to assure that our agents,
brokers and customers continue to receive superb coverage and engineering
service," said David Mathis, chairman and chief executive officer at Kemper.
"This partnership will provide Kemper an attractive way to continue offering our
valued producers and customers equipment breakdown coverage in existing, as well
as, newly designed commercial package policies."
"Kemper is a first-class organization with a reputation for quality and
creativity, their skills and resources complement our own," said Gordon Kreh,
president and chief executive officer of HSB. "We are committed to continuing
the tradition of excellence which has characterized Kemper's client service
capabilities."
HSB and Kemper expect to execute a definitive agreement by the end of May and
consummate the transaction one month later. The agreement will be subject to
customary closing conditions including regulatory approval.
HSB Group, Inc. (NYSE:HSB) is a global provider of insurance products and
engineering management consulting services. HSB Group is the parent company of
The Hartford Steam Boiler Inspection and Insurance Company, founded in 1866 to
provide loss prevention service and insurance to businesses, industries and
institutions.
Kemper Insurance Companies, with 1997 revenues of $4.4 billion, has operations
in property-casualty insurance, reinsurance, and risk management services. With
9,500 employees, it operates countrywide and in many foreign markets. For more
information about Kemper, visit its website at www.kemperinsurance.com.
