This transaction represents yet another change of course for Kemper, which said earlier this year that it would focus on expanding Kemper Services and offer its claim and insurance service capabilities to current and new customers. The company has already ceased much of its underwriting except for some residual activity needed to meet its existing obligations.

"Ultimately, we ended up believing that the best thing for all of our constituencies was to sell this business," said Linda Kingman, spokesperson for Kemper Insurance Companies, when asked about her company's decision to sell the unit.

Platinum Equity, as an acquisition firm, has been involved in many similar transactions--it often buys business units of large corporations that offer legacy products and services with well-established customer bases and distribution operations.

Last year Platinum bought the e-business unit of Paris, France-headquartered Alcatel, which has more than $1 billion in revenue. Since its founding in 1995, Platinum has completed more than 40 transactions.

Mark Barnhill, senior vice president at Platinum, told National Underwriter that the "serious discussion" with Kemper has occurred in the past four to six weeks. "We signed the definitive agreement, and the Illinois Department of Insurance approved the transaction on July 21.

"Kemper Services is now wholly owned by Platinum Equity. We will go through the re-branding process and announce the new name for the unit later this year," Mr. Barnhill said.

"This is a great opportunity for Platinum to acquire, operate and grow another market-leading portfolio company," added Johnny Lopez, executive vice president for mergers and acquisitions at Platinum. Kemper Services, Mr. Lopez noted, is well known in the insurance and risk management industry as a best-in-class service provider, "and we are confident that this business will thrive as an independent, stand-alone company."

Platinum said it isn't planning any significant staff restructuring for its new business unit. "We are expecting no significant workforce downsizing. We will continue to offer employment to more than 3,000 workers at Kemper Services. Its business and revenue base will determine whether there should be any changes in the future," Mr. Barnhill said. He also noted that Patricia Drago, president of Kemper Services, will continue to run the business.

Ms. Kingman added that one of the things Kemper Services will do is to continue to provide claims service for Kemper's insurance runoff business. "This is a positive for us because it maintains stability in claims service for our runoff business. That stability of claim handling will be an important part of our runoff plan," she said.

Ms. Kingman explained that her company would now focus primarily on the successful execution of its runoff plan. She also pointed out Kemper will continue to maintain its Eagle Insurance Group, "which is a high-hazard workers' comp. Its gross written premiums in 2002 was around $100 million and it has about 100 employees."