CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed the following ratings of Unitrin, Inc. (Unitrin) and removed them from Rating Watch Negative:

Unitrin

--Issuer Default Rating (IDR) at 'BBB-';

--$560 million senior notes at 'BB+'.

Trinity Universal Insurance Co.

United Insurance Co. of America

Union National Life Insurance Co.

Reliable Life Insurance Co.

--Insurer Financial Strength (IFS) rating at 'A-'.

The Rating Outlook for all ratings is Negative.

Unitrin's Negative Outlook mainly reflects Fitch's concern regarding the uncertainty at Fireside Bank, Unitrin's consumer finance business, over the next 12 to 18 months versus a more near-term concern reflected by the Negative Watch. On March 24, 2009, Unitrin announced a plan to exit the auto finance business and has suspended all new lending activity and ceased opening new certificates of deposit (CDs). While Fitch believes that Fireside Bank's existing capital and liquidity are adequate, a significant reduction in its funding source (CDs) could lead to capital being transferred from the insurance companies to support the bank.

As of June 30, 2009, Fireside Bank has shown modest improvement after suffering significant losses in 2008 and 2007. Delinquent balances and charge-offs, as a percent of loan balances, declined. However, as loan balances decline due to the suspension of loan originations, the ratio of delinquent balances and charge-offs to total loan balances are more likely to increase. Fireside Bank's operating results also improved during the second quarter leading to a marginal profit, which is partially attributable to the $30 million reduction in the provision to loan losses during the second quarter. Fitch will continue to monitor the bank's results during the run-off of its operations.


The ratings also reflect adequate capitalization of Unitrin's insurance subsidiaries, satisfactory operating results and significantly reduced equity exposure, which should lead to lower capital volatility.

Additionally, the ratings reflect Fitch's expectation that pricing softness in the property/casualty insurance marketplace will persist. Favorably, Unitrin's financial leverage remains within Fitch's expectation at 24.9% on June 30, 2009.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site. The issuer did not participate in the rating process other than through the medium of its public disclosure.





Fitch Ratings

Dafina M. Dunmore, CFA, 312-368-3136, Chicago

Greg Dickerson, 212-908-0220, New York

or

Media Relations:

Brian Bertsch, 212-908-0549, New York

Email: brian.bertsch@fitchratings.com

Source: Fitch Ratings