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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

FORM 10-K
(Mark One)

[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the fiscal year ended December 31, 1999.

[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from N/A to N/A.

Commission file number 0-18298

UNITRIN, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware 95-4255452
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)

One East Wacker Drive
Chicago, Illinois 60601
(Address of Principal Executive Offices) (Zip Code)

(312) 661-4600
(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.10 par value
Preferred Share Purchase Rights Pursuant to Rights Agreement
(Titles of classes)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Based on the closing market price of Registrant's common stock on December
31, 1999 the aggregate market value of such stock held by non-affiliates of
Registrant is approximately $2.4 billion. Solely for purposes of this
calculation, all executive officers and directors of Registrant are considered
affiliates.

Registrant had 70,992,897 shares of common stock outstanding as of
December 31, 1999.

Documents Incorporated by Reference

Part of the Form 10-K
Document into which incorporated

Portions of Proxy Statement for 2000 Annual Meeting Part III
- --------------------------------------------------------------------------------
PART I

ITEM 1. Business

Unitrin, Inc. ("Unitrin" or the "Company") was incorporated in Delaware in
1990. Unitrin's subsidiaries serve the basic financial needs of individuals,
families and small businesses by providing property and casualty insurance, life
and health insurance, and consumer finance services.

(a) General development of business

In February 1999, Unitrin's Board of Directors authorized a 2-for-1 stock
split in the form of a dividend distribution of one new share of common stock
for each share of common stock outstanding on the dividend's record date of
March 5, 1999. The stock dividend was paid on March 26, 1999. Based on the
approximately 36.7 million shares outstanding at the record date, the stock
dividend resulted in approximately 73.4 million shares outstanding as of March
26, 1999.

In June 1999, Unitrin's common stock was added to Standard & Poor's MidCap
400 Index. The S&P MidCap 400 Index consists of 400 domestic stocks chosen for
market size, liquidity and industry representation. Unitrin is now included in
the S&P MidCap 400 Index's property and casualty insurance industry group.
According to statistics published by S&P, the mean market capitalization of
stocks included in the S&P MidCap 400 Index as of June 1999 was approximately
$2.2 billion. Unitrin's market capitalization is approximately $2.5 billion.

On June 17, 1999, Unitrin completed its stock acquisition of Valley Group,
Inc. ("Valley Group") from Fund American Enterprises Holdings, Inc. (now known
as White Mountains Insurance Group Ltd.) for a total purchase price of
approximately $138.4 million in cash, including related transaction costs. As a
result of the acquisition, the Valley Group companies, including Valley
Insurance Company of Albany, Oregon and Charter Indemnity Company of Dallas,
Texas, became part of the Unitrin Property and Casualty Insurance Group. The
Valley Group companies write personal and commercial lines property and casualty
insurance, primarily in the Pacific Northwest, California and Texas. The
acquisition of Valley Group added approximately $88.1 million to Unitrin's
consolidated premium revenues for 1999.

On October 7, 1999, Unitrin's subsidiary, United Insurance Company of
America ("United"), entered into an agreement with Ceres Group, Inc. for the
sale of United's subsidiary, The Pyramid Life Insurance Company ("Pyramid"), to
Ceres Group, Inc. for $67.5 million in cash, subject to adjustment for a
dividend to be paid by Pyramid immediately prior to closing. Based in Mission,
Kansas, Pyramid specializes in the sale of health insurance products, including
Medicare Supplement, targeted at the senior market. Pyramid had premium
revenues of approximately $63.6 million in 1999, representing less than 5% of
Unitrin's consolidated insurance premium revenues. The transaction is subject
to regulatory approvals and the satisfaction of other customary closing
conditions, and is required to close by February 15, 2000, unless extended by
both parties.

In 1999, United discontinued the sales operations of its Worksite Products
Division. Worksite Products Division specialized in employer-paid and voluntary
group and individual life insurance products and Section 125 administration
programs sold to employers, financial institutions, credit unions and banks.
Worksite Products Division had premium revenues of approximately $8 million in
1999. United currently is in the process of completing the wind-down of all
Worksite Products Division operations.

On December 16, 1999, Unitrin's subsidiary, Valley Insurance Company,
entered into an agreement with Motor Club of America for the sale of Valley's

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subsidiary, Mountain Valley Indemnity Company ("Mountain Valley"), to Motor Club
of America for $7.5 million in cash. Acquired by Unitrin in June 1999 in
connection with the Valley Group acquisition, Mountain Valley is based in
Manchester, New Hampshire and sells mainly commercial property and casualty
insurance in the New England states. Results for the Unitrin Property and
Casualty Insurance Group in 1999 include premiums of $8.7 million and an
operating loss of $3.1 million attributable to Mountain Valley. The transaction
is subject to regulatory approvals and the satisfaction of other customary
closing conditions, and is required to close by February 29, 2000, unless
extended by both parties.

Effective January 3, 2000, Unitrin established a separate business unit
that will use a distribution methodology for the marketing and sale of personal
automobile insurance through direct mail, radio and television advertising and
over the Internet. This business unit will utilize one of Unitrin's existing
insurance subsidiaries to be renamed as "Unitrin Direct Insurance Company"
("Unitrin Direct") and its operations will be accounted for as a separate
business segment. It is anticipated that the majority of 2000 will be devoted to
hiring employees, identifying and renting office space, refining products and
product rates, developing advertising and marketing materials, and other
matters. Accordingly, it is expected that Unitrin Direct will have an
insignificant amount of revenue in 2000 relative to its expenses, and that it
likely will produce operating losses for at least the next few years.

During 1999, Unitrin repurchased, on a post-split basis, approximately 5.5
million shares of its common stock in open market transactions at an aggregate
cost of approximately $191.4 million. Unitrin has repurchased, on a post-split
basis, approximately 50.0 million shares of its common stock at an aggregate
cost of approximately $1.3 billion since 1990. At December 31, 1999,
approximately 4.2 million shares of Unitrin common stock remained under the
Company's outstanding repurchase authorizations.

(b) Business segment financial data

Financial information about the Company's business segments for the years
ended December 31, 1999, 1998, and 1997 is contained in the following portions
of this 1999 Annual Report on Form 10-K of Unitrin, Inc. and is incorporated
herein by reference: (i) Note 17 to the Company's Consolidated Financial
Statements, which financial statements are further described in Item 14(a)1
hereto and filed as Exhibit 13.1 hereto and incorporated by reference into Item
8 hereof (the "Financial Statements"), and (ii) "Management's Discussion and
Analysis of Results of Operations and Financial Condition," which is filed as
Exhibit 13.2 hereto and incorporated by reference into Item 7 hereof (the
"MD&A").

Caution Regarding Forward-Looking Statements

This 1999 Annual Report on Form 10-K, and the accompanying Financial
Statements and MD&A, contain forward-looking statements which usually include
words such as "believe(s)," "goal(s)," "target(s)," "estimate(s),"
"anticipate(s)," "forecast(s)" and similar expressions. Readers are cautioned
not to place undue reliance on such statements, which speak only as of the date
of this 1999 Annual Report on Form 10-K. Forward-looking statements are subject
to risks and uncertainties which could cause actual results to differ materially
from those contemplated in such statements. Such risks and uncertainties
include, but are not limited to, those described in the MD&A, changes in
economic factors (such as interest rates), changes in competitive conditions
(including availability of labor with required technical or other skills), the
number and severity of insurance claims (including those associated with
catastrophe losses), governmental actions (including new laws or regulations or
court decisions interpreting existing laws and regulations) and adverse
judgments in litigation to which the Company or its subsidiaries are parties.
No assurances can be given that the results contemplated in any forward-looking

2
statements will be achieved. The Company assumes no obligation to release
publicly any revisions to any forward-looking statements as a result of events
or developments subsequent to the date of this 1999 Annual Report on Form 10-K.

(c) Description of business

Unitrin's subsidiaries currently operate in three segments: Property and
Casualty Insurance, Life and Health Insurance, and Consumer Finance. Unitrin
and its subsidiaries have nearly 7,800 full-time employees of which
approximately 5,200 are employed in the Life and Health Insurance segment, 1,800
in the Property and Casualty Insurance segment, and 600 in the Consumer Finance
segment. Beginning in 2000, Unitrin Direct's activities will be accounted for
as Unitrin's fourth business segment.

Property and Casualty Insurance

Trinity Universal Insurance Company ("Trinity"), together with its
subsidiaries and affiliates (collectively, the "Unitrin Property and Casualty
Insurance Group"), comprise a network of regional insurers operating mainly in
the southern, midwestern, western and northwestern regions of the United States.
With principal operations located in 33 states, the Unitrin Property and
Casualty Insurance Group has over 630,000 policies in force. The states which
provided the largest amount of 1999 premium are Texas (35%), California (13%),
Oregon (6%), Wisconsin (6%), Illinois (5%), Washington (5%), and Louisiana (4%).

Property insurance indemnifies an insured with an interest in physical
property for loss of such property or the loss of its income-producing
abilities. Casualty insurance primarily covers liability for damage to property
of, or injury to, a person or entity other than the insured.

Products and Distribution

The Unitrin Property and Casualty Insurance Group provides automobile,
homeowners, commercial multi-peril, motorcycle, boat and watercraft, fire,
casualty, workers compensation, and other types of property and casualty
insurance to individuals and businesses. Automobile insurance accounted for
31%, 36%, and 40% of Unitrin's consolidated insurance premiums for the years
ended December 31, 1999, 1998, and 1997, respectively.

Preferred and standard risk insurance products are marketed exclusively by
over 2,200 independent agents in 2,700 locations. These personal and commercial
products are designed and priced for those individuals and businesses that have
demonstrated favorable risk characteristics and loss history. Typical customers
include "main street" businesses and middle income families. Products are
marketed primarily in suburban and rural communities. Trinity and certain of
Unitrin's subsidiaries (Milwaukee Casualty Insurance Co., Milwaukee Safeguard
Insurance Company, Security National Insurance Company, Trinity Universal
Insurance Company of Kansas, Inc., Union Automobile Indemnity Company, Valley
Insurance Company and Valley Property & Casualty Insurance Company) and
affiliates (Milwaukee Mutual Insurance Company and Trinity Lloyd's Insurance
Company) principally provide the Unitrin Property and Casualty Insurance Group's
preferred and standard products in 30 states including Texas, California,
Oregon, Wisconsin, Illinois, Washington, Louisiana, Minnesota, and other
southern, midwestern, western and northwestern states. These products accounted
for approximately 75% of the Unitrin Property and Casualty Insurance Group's
1999 premium revenue.

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Specialty insurance products are principally provided by Financial
Indemnity Company, Alpha Property & Casualty Insurance Company, Charter
Indemnity Company and Charter County Mutual Insurance Company, and include
nonstandard personal and commercial automobile, motorcycle, and specialty
watercraft insurance. Nonstandard automobile insurance is provided for
individuals and companies that have had difficulty obtaining standard or
preferred risk insurance, usually because of their driving records. Nonstandard
automobile insurance products are marketed through approximately 9,800
independent agents in 10,500 locations in California, Texas and 31 other states.

Storms/Catastrophe Losses

Severe weather and catastrophic events, such as hurricanes, tornadoes,
earthquakes and wind, ice and hail storms, are inherent risks of the property
insurance business. Such occurrences result in insurance losses that are and
will continue to be a material factor in the results of operations and financial
position of the Unitrin Property and Casualty Insurance Group. Further, because
the level of these insurance losses experienced in any year cannot be predicted,
these losses contribute to the year-to-year fluctuations in the Unitrin Property
and Casualty Insurance Group's results of operations and financial position. As
a consequence, the Unitrin Property and Casualty Insurance Group has implemented
certain management strategies intended to reduce exposure to storm and
catastrophe losses, including, as described below, geographic diversification of
property insurance risk and catastrophe reinsurance arrangements. Although
management believes that such strategies have reduced or will reduce the Unitrin
Property and Casualty Insurance Group's exposure to storm and catastrophe losses
over time, the extent of such reduction is uncertain.

With respect to storm losses, the frequency and occurrence of severe
weather cannot be predicted in any year. However, geographic location can have
an impact on a property insurer's exposure to losses from storms. Moreover,
these storms add an element of seasonality to property insurance claims, since
windstorms and tornadoes tend to occur in the spring of the year, while
hurricanes generally occur in the summer and fall. Historically, the Unitrin
Property and Casualty Insurance Group has written a sizable portion of its
business in Texas, the plains states, and certain coastal areas that are prone
to storms. The Unitrin Property and Casualty Insurance Group has endeavored to
reduce its vulnerability to storm losses through a combination of geographic
expansion outside of these areas and reduced concentration of property business
in storm-prone areas.

As a part of the Unitrin Property and Casualty Insurance Group's overall
reinsurance program, management acquires excess of loss reinsurance coverage
designed specifically to protect against losses arising from catastrophic events
such as storms. The Group's catastrophe reinsurance program is typically
purchased annually and is structured according to a series of coverage layers
based on geographic region. For example, the 1999 catastrophe reinsurance
program for the Unitrin Property and Casualty Insurance Group (excluding the
Valley Group companies which had their own independent program) provided for $15
million in reinsurance protection for losses that exceeded $10 million in Texas,
Louisiana and Alabama. For losses in states other than Texas, Louisiana and
Alabama that were covered by the 1999 catastrophe program, the reinsurance
provided $21 million in protection for losses that exceeded $4 million. In
addition, for losses in all states covered by the 1999 catastrophe program, the
reinsurance provided $30 million in protection for losses exceeding $25 million.
Based on external modeling studies, the Unitrin Property and Casualty Insurance
Group's estimated probable maximum loss for storms occurring in all states with
a statistical frequency of occurrence of once per 100 years is approximately $30
million. For further discussion of the Unitrin Property and Casualty Insurance
Group reinsurance program, see discussion below and Note 18 to the Financial
Statements.

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Pricing

Pricing levels for property and casualty insurance are influenced by many
factors, including the frequency and severity of claims, state regulation and
legislation, competition, general business conditions, inflation, expense
levels, and judicial decisions. In addition, many state regulators require
consideration of investment income when approving or setting rates, which
reduces underwriting margins.

Reinsurance

Consistent with insurance industry practice, the Unitrin Property and
Casualty Insurance Group companies utilize reinsurance arrangements to limit
their maximum loss, provide greater diversification of risk and minimize
exposures on larger risks. Under these arrangements, the Unitrin Property and
Casualty Insurance Group is indemnified by reinsurers for losses incurred under
insurance policies issued by the Group's companies. As reinsurance does not
discharge the Unitrin Property and Casualty Insurance Group from its direct
obligations to policyholders on risks insured, the Group remains contingently
liable. However, so long as the reinsurers meet their obligations, the Unitrin
Property and Casualty Insurance Group's net liability is limited to the amount
of risk it retains. See Note 18 to the Financial Statements.

Competition

Based on the most recent data published by A.M. Best Company ("A.M. Best")
as of the end of 1998, there were approximately 1,100 property and casualty
insurance organizations in the United States, made up of nearly 2,500 companies.
Prior to the acquisition of Valley Group, the Unitrin Property and Casualty
Insurance Group ranked among the 75 largest property and casualty insurance
company organizations in the United States, measured by admitted assets (74th),
net premiums written (67th), and policyholders' surplus (51st). With Valley
Group, the Unitrin Property and Casualty Insurance Group now ranks among the 60
largest property and casualty insurance groups in the nation.

In 1998, the industry's estimated net premiums written were over $281
billion, more than 76% of which were accounted for by 50 groups of companies.
The Unitrin Property and Casualty Insurance Group wrote less than 1% of the
industry's estimated 1998 premium volume.

Over the past several years, the property and casualty insurance industry
has experienced progressively intense competition. This escalation is due in
large part to the entry of new capital into the industry and the efforts of
incumbent companies to maintain and expand existing market shares. As a
consequence, the industry's capacity to underwrite risks in many cases has
outpaced consumer demand for property and casualty coverage, particularly with
respect to personal lines products such as automobile insurance. This
competitive environment has manifested itself throughout the industry in a
number of ways, including falling prices, low revenue growth and deterioration
in operating profits.

The Unitrin Property and Casualty Insurance Group has not been immune to
the effects of this environment and expects competitive pricing, particularly in
personal automobile lines, to continue to put pressure on premium growth and
profit margins. To remain competitive, the Group's strategy includes, among
other measures, (i) using appropriate pricing, (ii) maintaining underwriting
discipline, (iii) selling to selected markets, (iv) utilizing technological
innovations for the marketing and sale of insurance, (v) controlling expenses,
(vi) maintaining ratings from A.M. Best, (vii) providing quality services to
agents and policyholders, and (viii) making strategic acquisitions of suitable
property and casualty insurers.

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Life and Health Insurance

Unitrin conducts its life and health insurance business through United and
United's subsidiaries, Union National Life Insurance Company ("Union National
Life"), Reserve National Insurance Company ("Reserve National") and Pyramid, and
Unitrin's subsidiary, The Reliable Life Insurance Company ("Reliable")
(collectively, the "Unitrin Life and Health Insurance Group"). As disclosed in
Item 1(a) above, the sale of Pyramid by Unitrin is currently pending.

The Unitrin Life and Health Insurance Group mainly focuses on providing
individual life and health insurance products to customers who desire
fundamental protection for themselves and their families. The leading product
of the Unitrin Life and Health Insurance Group is ordinary life insurance,
including permanent and term insurance, with an average face amount of
approximately $8,000. This product accounted for 29%, 29%, and 26% of Unitrin's
consolidated insurance premiums for the years ended December 31, 1999, 1998, and
1997, respectively. Premiums are typically charged on a monthly basis and
average approximately $22 per month. Permanent policies are offered primarily
on a non-participating, guaranteed-cost basis.

Career Agents

Approximately 74% of the Unitrin Life and Health Insurance Group's premiums
result from insurance products offered and distributed by the Group's career
agents. United, along with Reliable and Union National Life, employ over 3,100
career agents to distribute traditional whole life insurance products in 26
states. These career agents are full-time employees who call on customers in
their homes to sell life and health insurance products, provide services related
to policies in force and collect premiums, typically monthly. Property
insurance products written by United's subsidiaries, United Casualty Insurance
Company of America ("United Casualty") and Union National Fire Insurance Company
("Union National Fire"), are also distributed by the Group's career agents.

Customers of Unitrin's career agency companies generally are families with
an annual income of less than $25,000. According to figures assembled by the
U.S. Bureau of the Census as of 1995, there are over 36 million households in
the United States with less than $25,000 of annual income, representing about
37% of all households.

In 1999, Unitrin's career agency companies, United, Reliable and Union
National Life, underwent a rigorous self and independent assessment of their
market conduct practices and earned membership in the Insurance Marketplace
Standards Association ("IMSA"). IMSA is a voluntary membership organization
whose purpose is to promote high ethical standards in the sale of individual
life insurance and individual annuity products. IMSA membership must be renewed
every three years.

Independent Agents

Reserve National has approximately 200 independent agents appointed to
market and distribute health insurance products. Licensed in 31 states
throughout the South, Southwest and Midwest, Reserve National specializes in the
sale of limited benefit accident and health insurance products and Medicare
Supplement insurance, primarily to individuals living in rural areas where
health maintenance organizations and preferred provider organizations are less
prevalent.

Pricing

Premiums for life and health insurance products are based on assumptions
with respect to mortality, morbidity, investment yields, expenses, and lapses
and are also affected by state laws and

6
regulations, as well as competition. Pricing assumptions are based on the
experience of the Unitrin Life and Health Insurance Group, as well as the
industry in general, depending upon the factor being considered. The actual
profit or loss produced by a product will vary from the anticipated profit if
the actual experience differs from the assumptions used in pricing the product.

Premiums for policies sold through the Unitrin Life and Health Insurance
Group's career agents are set at levels designed to cover the relatively higher
cost of this method of distribution. As a result of such higher expenses,
incurred claims as a percentage of premium income tend to be lower for companies
utilizing this method of distribution than the insurance industry average.

Premiums for Medicare Supplement and other accident and health policies
must take into account the rising costs of medical care. The annual rate of
medical cost inflation has historically been higher than the general rate of
inflation, necessitating frequent rate increases, most of which are subject to
approval by state regulatory agencies.

Reinsurance

Consistent with insurance industry practice, the Unitrin Life and Health
Insurance Group companies utilize reinsurance arrangements to limit their
maximum loss, provide greater diversification of risk and minimize exposures on
larger risks. Under these arrangements, the Unitrin Life and Health Insurance
Group is indemnified by reinsurers for losses incurred under insurance policies
issued by the Group's companies. Included among the Group's reinsurance
arrangements is excess of loss reinsurance coverage specifically designed to
protect against losses arising from catastrophic events such as storms under the
property insurance policies written by United Casualty and Union National Fire.

As reinsurance does not discharge the Unitrin Life and Health Insurance
Group from its direct obligations to policyholders on risks insured, the Group
remains contingently liable. However, so long as the reinsurers meet their
obligations, the Unitrin Life and Health Insurance Group's net liability is
limited to the amount of risk it retains. For descriptions of certain of the
reinsurance arrangements of the Unitrin Life and Health Insurance Group, see the
MD&A and Note 18 to the Financial Statements.

Lapse Ratio

The lapse ratio is a measure reflecting a life insurer's loss of existing
business. For a given year, this ratio is commonly computed as the total face
amount of individual life insurance policies lapsed, surrendered, expired and
decreased during such year, less policies increased and revived during such
year, divided by the total face amount of policies at the beginning of the year
plus the face amount of policies issued and reinsurance assumed in the prior
year. The Unitrin Life and Health Insurance Group's lapse ratios for individual
life insurance were 10%, 12%, and 15% for the years 1999, 1998, and 1997,
respectively.

The customer base served by the Unitrin Life and Health Insurance Group's
career agents and competing life insurance companies tends to have a higher
incidence of lapse than other demographic segments of the population. Thus, to
maintain or increase the level of its business, the Unitrin Life and Health
Insurance Group's career agents must continue to write a high volume of new
policies.

Competition

Based on the most recent data published by A.M. Best as of the end of 1998,
there were approximately 550 life and health insurance company groups in the
United States, made up of more than

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1,100 companies.  The Unitrin Life and Health Insurance Group ranked among the
100 largest life and health insurance company groups, as measured by admitted
assets (88th), net premiums written (93rd), and capital and surplus (53rd).

Unitrin's insurance subsidiaries generally compete using appropriate
pricing, selling to selected markets, controlling expenses, maintaining ratings
from A.M. Best, and providing competitive services to agents and policyholders.

Consumer Finance

Unitrin's subsidiary, Fireside Thrift Co. ("Fireside Thrift"), is engaged
in the consumer finance business. Fireside Thrift is organized under California
law as an industrial loan company and is a member of the Federal Deposit
Insurance Corporation (the "FDIC"). Industrial loan companies are sometimes
also referred to as thrift and loan companies and are distinct from both savings
and loan associations and banks. See also "Regulation" below.

Fireside Thrift's principal business is the financing of used automobiles
through the purchase of conditional sales contracts from automobile dealers.
Fireside Thrift also makes personal loans, mostly secured by automobiles. The
borrowers under these contracts and loans typically have marginal credit
histories.

Fireside Thrift has 35 branches in California and one loan production
office in Arizona. In addition, 1999 marked Fireside Thrift's geographic
expansion into a third state of operation with the opening of a new loan
production office in Portland, Oregon. Fireside Thrift does business with over
2,000 automobile dealers in California, Arizona and Oregon, and is one of the
largest sub-prime automobile lenders in California. Fireside Thrift has in
excess of $600 million in loans outstanding representing loans to over 100,000
consumers.

Strong loan underwriting and collection practices are key elements to
successful operating performance in the sub-prime automobile finance business.
Nearly 80% of Fireside Thrift's operating expenses are devoted to underwriting
and collection activities. Fireside Thrift individually underwrites each loan
application and historically has declined to extend credit to more than three
quarters of its loan applicants. See the discussion of Fireside Thrift's loan
loss reserves under the heading "Consumer Finance" in the MD&A and Note 6 to the
Financial Statements. Fireside Thrift competes for loans primarily on the basis
of timely service to its customers and by offering competitive loan terms.
Principal competitors include banks, finance companies, "captive" credit
subsidiaries of automobile manufacturers, and other industrial loan companies.

Fireside Thrift's financing activities are funded primarily by thrift
investment certificates (i.e., interest-bearing instruments that may be redeemed
by the owner or repurchased by Fireside Thrift under certain circumstances)
ranging from thirty-one days to five years in maturity and money market
accounts. Fireside Thrift competes for funds primarily with banks, savings and
loan associations, and other industrial loan companies.

Investments

The quality, nature, and amount of the various types of investments which
can be made by insurance companies are regulated by state laws. Depending on
the state, these laws permit investments in qualified assets, including
municipal, state and federal government obligations, corporate bonds, real
estate, preferred and common stocks, and mortgages where the value of the
underlying real estate exceeds the amount of the loan.

8
Unitrin's investment strategy is based on current market conditions and
other factors that it reviews from time to time. Unitrin's consolidated
investment portfolio consists primarily of United States Government obligations,
investment-grade fixed maturities, equity securities and investments in
investees. The Company's investment in non-investment grade, fixed maturity
investments is insignificant. See the discussions of the Company's investments
under the headings "Investees," "Investment Results," "Quantitative and
Qualitative Disclosures about Market Risk," and "Liquidity and Capital
Resources" in the MD&A and Notes 4, 5 and 13 to the Financial Statements.

Regulation

Insurance Regulation

Unitrin is subject to the insurance holding company laws of several states.
Certain dividends and distributions by an insurance subsidiary to its holding
company are subject to approval by the insurance regulators of the state of
incorporation of such subsidiary. Other significant transactions between an
insurance subsidiary and its holding company or other subsidiaries of the
holding company may require approval by insurance regulators in the state of
incorporation of each of the insurance subsidiaries participating in such
transactions.

Unitrin's insurance subsidiaries are subject to regulation in the states in
which they do business. Such regulation pertains to matters such as approving
policy forms and various premium rates, licensing agents, granting and revoking
licenses to transact business and regulating trade practices. The majority of
Unitrin's insurance operations are in states requiring prior approval by
regulators before proposed rates for property, casualty, or health insurance
policies may be implemented. However, rates proposed for life insurance
generally become effective immediately upon filing with a state, even though the
same state may require prior rate approval for other types of insurance.
Insurance regulatory authorities perform periodic examinations of an insurer's
market conduct and other affairs.

State insurance regulators also prescribe the form and content of statutory
financial statements, perform periodic financial examinations of insurers, set
minimum reserve and loss ratio requirements, establish standards for the types
and amounts of investments and require minimum capital and surplus levels. Such
statutory capital and surplus requirements include risk-based capital ("RBC")
rules promulgated by the National Association of Insurance Commissioners (the
"NAIC"). Compliance with the RBC rules is determined by the ratio of total
adjusted capital to the authorized control level RBC, in each case as defined by
the NAIC. At December 31, 1999, each of Unitrin's insurance subsidiaries was in
compliance with RBC requirements.

The NAIC annually calculates certain statutory financial ratios for most
insurance companies in the United States. These calculations are known as the
Insurance Regulatory Information System ("IRIS") ratios. There presently are
twelve IRIS ratios. The primary purpose of the ratios is to provide an "early
warning" of any negative developments. The NAIC reports the ratios to state
regulators who may then contact the companies if three or more ratios fall
outside the NAIC's "usual ranges." Based upon calculations as of December 31,
1998 no Unitrin companies, including the Valley Group, had three or more IRIS
ratios outside the usual range.

In addition, the Company's insurance subsidiaries are required under the
guaranty fund laws of most states in which they transact business to pay
assessments up to prescribed limits to fund policyholder losses or liabilities
of insolvent insurance companies. The Company's insurance subsidiaries also are

9
required to participate in various involuntary pools, principally involving
workers compensation and windstorms. In most states, the involuntary pool
participation of the Company's insurance subsidiaries is in proportion to their
voluntary writings of related lines of business in such states.

Consumer Finance Regulation

Fireside Thrift is regulated by the California Department of Financial
Institutions and is subject to the provisions of the California Industrial Loan
Law, which imposes minimum capitalization requirements, limits dividends,
regulates loan terms, collection practices and remedies, and mandates disclosure
of certain contract terms. In addition, since Fireside Thrift is a member of
the FDIC, it is subject to regulations imposed by the FDIC on member
institutions, including federal consumer credit regulations. Fireside Thrift is
also governed by Federal Reserve Board regulations applicable to non-member
state banks.

ITEM 2. Properties

Owned Properties

Unitrin's subsidiary, United, owns the 41-story office building at One East
Wacker Drive, Chicago, Illinois, that houses the executive offices of Unitrin
and United. Unitrin and United occupy approximately 109,000 square feet of the
527,000 rentable square feet in the building. In addition, Unitrin subsidiaries
together own 21 buildings located in 12 states consisting of approximately
493,000 square feet in the aggregate.

Leased Facilities

The Unitrin Life and Health Insurance Group leases facilities at 193
locations in 25 states with aggregate square footage of approximately 415,000.
The latest expiration date of the existing leases is October 2006.

The Unitrin Property and Casualty Insurance Group leases facilities at 17
locations in 11 states with an aggregate square footage of approximately
356,000. The latest expiration date of the existing leases is July 2007.

Fireside Thrift occupies 39 leased facilities (including consumer finance
branches and main office buildings) with an aggregate square footage of
approximately 152,000. The latest expiration date of the existing leases is
September 2008.

The properties described above are in good condition and suitable for all
presently anticipated requirements of the Company.

ITEM 3. Legal Proceedings

Unitrin and its subsidiaries are parties to various legal actions
incidental to their businesses; some of these actions seek substantial punitive
damages that bear no apparent relationship to the actual damages alleged. In
addition, the plaintiffs in certain of these suits seek class action status
which, if granted, could expose the Company to potentially significant liability
by virtue of the size of the purported classes. Although no assurances can be
given and no determination can be made as of the date hereof as to the outcome
of any particular legal action, the Company and its subsidiaries believe that
there are meritorious defenses to these legal actions and are defending them
vigorously. Unitrin believes that resolution of these matters will not have a
material adverse effect on Unitrin's financial position.

10
ITEM 4. Submission of Matters to a Vote of Security Holders

During the quarter ended December 31, 1999, no matters were submitted to a
vote of shareholders.

PART II

ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters

Unitrin's common stock is traded on the National Market Tier of the Nasdaq
Stock Market. The high and low prices for Unitrin's common stock during each
quarterly period in 1999 and 1998 are incorporated herein by reference to Note
19 to the Financial Statements, captioned "Quarterly Financial Information
(Unaudited)."

Information as to the amount and frequency of cash dividends declared by
Unitrin on its common stock during 1999 and 1998 is incorporated herein by
reference to the following portions of the Financial Statements:

(a) Consolidated Statements of Shareholders' Equity and Comprehensive
Income; and

(b) Dividends Paid to Common Shareholders (Per Share) included in Note 19
under the caption "Quarterly Financial Information (Unaudited)."

Information as to restrictions on the ability of Unitrin's subsidiaries to
transfer funds to Unitrin in the form of cash dividends, loans, or advances is
incorporated herein by reference to the following items:

(a) Note 9 to the Financial Statements, captioned "Shareholders' Equity;"
and

(b) The "Liquidity and Capital Resources" section of the MD&A.

As of December 31, 1999, the approximate number of record holders of
Unitrin's common stock was 8,500.

ITEM 6. Selected Financial Data

Selected consolidated financial data for the five years ended December 31,
1999 is incorporated herein by reference to the data captioned "Financial
Highlights" and filed as Exhibit 13.3 hereto.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The MD&A is incorporated herein by reference and filed as Exhibit 13.2
hereto.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

These disclosures are contained in the section of the MD&A entitled
"Quantitative and Qualitative Disclosures About Market Risk" which is
incorporated herein by reference and filed as Exhibit 13.2 hereto.

11
ITEM 8. Financial Statements and Supplementary Data

The Financial Statements (including their related notes and the report of
KPMG LLP) are incorporated herein by reference and filed as Exhibit 13.1 hereto.

ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

There was no change in, or disagreement with, the Company's accountants
during or relating to the year ended December 31, 1999.

PART III

ITEM 10. Directors and Executive Officers of the Registrant

Information regarding directors and executive officers, including, to the
extent applicable, information required by Item 405 of Regulation S-K, is
incorporated herein by reference to the sections captioned "Election of
Directors" and "Executive Officers" in the Proxy Statement for the 2000 Annual
Meeting of Shareholders of Unitrin. Unitrin plans to file such proxy statement
within 120 days after December 31, 1999, the end of Unitrin's fiscal year.

ITEM 11. Executive Compensation

Information regarding compensation of executive officers is incorporated
herein by reference to the section captioned "Compensation of Executive
Officers" in the Proxy Statement for the 2000 Annual Meeting of Shareholders of
Unitrin. Neither the joint report by the Compensation and Stock Option
Committees of Unitrin's Board of Directors nor the Unitrin stock performance
graph to be included in such proxy statement shall be deemed to be incorporated
herein by this reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

This information is incorporated herein by reference to the section
captioned "Ownership of Common Stock" in the Proxy Statement for the 2000 Annual
Meeting of Shareholders of Unitrin.

ITEM 13. Certain Relationships and Related Transactions

This information is incorporated herein by reference to the section
captioned "Compensation Committee Interlocks and Insider Participation" in the
Proxy Statement for the 2000 Annual Meeting of Shareholders of Unitrin.

PART IV

ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) Documents filed as part of this Report:

1. Financial Statements. The following financial statements, in response to
Item 8 of the Form 10-K, have been filed as Exhibit 13.1 and are
incorporated by reference into Item 8 hereof:

The consolidated balance sheets of Unitrin and subsidiaries as of December
31, 1999 and 1998, and the consolidated statements of income, cash flows
and shareholders' equity and

12
comprehensive income for the years ended December 31, 1999, 1998 and 1997,
together with the notes thereto and the report of KPMG LLP thereon, dated
January 24, 2000.

2. Financial Statement Schedules. The following four financial statement
schedules are included on the following pages hereof. Schedules not listed
here have been omitted because they are not applicable or not material or
the required information is included in the Financial Statements.

Schedule I: Investments Other Than Investments in Related Parties
Schedule II: Parent Company Financial Statements
Schedule III: Supplementary Insurance Information
Schedule IV: Reinsurance Schedule

Financial Statements of Litton Industries, Inc., a 50% or less owned
person, to be filed by amendment.

3. Exhibits. The following exhibits are either filed as a part hereof or are
incorporated by reference. Exhibit numbers correspond to the numbering
system in Item 601 of Regulation S-K. Exhibits 10.1 through 10.7 relate to
compensatory plans filed or incorporated by reference as exhibits hereto
pursuant to Item 14(c) of Form 10-K.

3.1 Certificate of Incorporation (incorporated herein by reference to
Exhibit 3.1 to the Company's Registration Statement on Form 10 dated
February 15, 1990)

3.2 Amended and Restated By-Laws (incorporated herein by reference to
Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997)

4 Rights Agreement between Unitrin, Inc. and First Chicago Trust
Company of New York, as rights agent, dated as of August 3, 1994
(incorporated herein by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A dated August 3, 1994)

10.1 Unitrin, Inc. 1990 Stock Option Plan, as amended and restated
(incorporated herein by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999)

10.2 Unitrin, Inc. 1997 Stock Option Plan (incorporated herein by
reference to Exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1999)

10.3 Unitrin, Inc. 1995 Non-Employee Director Stock Option Plan
(incorporated herein by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999)

10.4 Unitrin, Inc. Pension Equalization Plan (incorporated herein by
reference to Exhibit 10.4 to the Company's 1994 Annual Report on
Form 10-K)

10.5 Unitrin is a party to individual severance agreements (the form of
which is incorporated herein by reference to Exhibit 10.5 to the
Company's 1994 Annual Report on Form 10-K), with the following
executive officers:

13
Richard C. Vie (Chairman, President and Chief Executive
Officer)
David F. Bengston (Vice President)
James W. Burkett (Senior Vice President)
Eric J. Draut (Senior Vice President, Treasurer and Chief
Financial Officer )
Scott Renwick (General Counsel and Secretary)
Donald G. Southwell (Senior Vice President)

(Note: Each of the foregoing agreements is identical except that
the severance compensation multiple is 2.99 for Mr. Vie and 2.0 for
the other executive officers. The term of these agreements has been
extended by action of Unitrin's Board of Directors through January
1, 2001.)

10.6 Severance Compensation Plan After Change of Control (incorporated
herein by reference to Exhibit 10.6 to the Company's 1994 Annual
Report on Form 10-K; the term of this plan has been extended by
action of Unitrin's Board of Directors through January 1, 2001)

10.7 1998 Unitrin, Inc. Bonus Plan for Senior Executives (incorporated
herein by reference to Exhibit A to the Proxy Statement dated April
9, 1998, in connection with the Annual Meeting of Shareholders of
Unitrin held May 13, 1998)

10.8 Amended and Restated Credit Agreement, dated September 17, 1997
among Unitrin, Inc., the Lenders party thereto, and NationsBank of
Texas, N.A. (incorporated herein by reference to Exhibit 10.7 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997)

13.1 Financial Statements

13.2 MD&A

13.3 Financial Highlights

21 Subsidiaries of Unitrin, Inc.

23.1 Reports of KPMG LLP (included in Exhibit 13.1 hereof and filed as
Exhibit 23.1 hereof)

23.2 Consent of KPMG LLP

24 Power of Attorney (included on the signature page hereof)

27 Financial Data Schedule

(b) Reports on Form 8-K. None

(c) Exhibits. Included in Item 14(a)3 above.

(d) Financial Statement Schedules. Included in Item 14(a)2 above.

14
SCHEDULE I

UNITRIN, INC. AND SUBSIDIARIES
INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES
DECEMBER 31, 1999
(Dollars in Millions)

<TABLE>
<CAPTION>
Amount
Amortized Fair Carried in
Cost Value Balance Sheet
------------- -------------- -------------
<S> <C> <C> <C>
Fixed Maturities:
Bonds and Notes:
United States Government and
Government Agencies and Authorities $ 1,902.3 $ 1,870.6 $ 1,870.6
States, Municipalities
and Political Subdivisions 187.4 184.2 184.2
Corporate Securities:
Other Bonds and Notes 518.8 488.5 488.5
Redemptive Preferred Stocks 118.3 108.5 108.5
------------- -------------- -------------
Total Investments in Fixed Maturities 2,726.8 2,651.8 2,651.8
------------- -------------- -------------

Equity Securities:
Common Stocks 358.8 423.2 423.2
Non-redemptive Preferred Stocks 92.0 89.4 89.4
------------- -------------- -------------
Total Investments in Equity Securities 450.8 512.6 512.6
------------- -------------- -------------

Investees (A)
Litton Industries, Inc. 374.0 631.3 374.0
UNOVA, Inc. 158.6 164.6 158.6
Curtiss-Wright Corporation 108.0 161.6 108.0
------------- -------------- -------------
Total Investees 640.6 957.5 640.6
------------- -------------- -------------

Loans, Real Estate and Short-term Investments 291.8 XXX.X 291.8
------------- -------------

Total Investments $ 4,110.0 $ 4,096.8
============= =============
</TABLE>

(A) - Amortized Cost = Cost Plus Cumulative Undistributed Earnings.


See Accompanying Independent Auditors' Report.
SCHEDULE II
UNITRIN, INC.
PARENT COMPANY BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(Dollars in Millions)

<TABLE>
<CAPTION>
December 31,
------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
ASSETS

Investment in Subsidiaries and Investees $ 2,392.5 $ 2,288.5
Equity Securities at Fair Value (Cost: 1999 - $0.3; 1998 - $310.0) 0.5 259.4
Short Term Investments 29.0 90.0
Other Assets 1.2 19.0
-------------- --------------

Total Assets $ 2,423.2 $ 2,656.9
============== ==============


LIABILITIES AND SHAREHOLDERS' EQUITY

Notes Payable - Revolving Credit Agreement $ 111.0 110.0
Notes Payable to Subsidiary, 6.75% Due 2008 450.0 450.0
Accrued Expenses and Other Liabilities 145.2 274.5
-------------- --------------

Total Liabilities 706.2 834.5
-------------- --------------

Shareholders' Equity:
Common Stock 7.1 7.6
Additional Paid-in Capital 439.6 427.6
Retained Earnings 1,280.1 1,374.0
Accumulated Other Comprehensive Income (9.8) 13.2
-------------- --------------

Total Shareholders' Equity 1,717.0 1,822.4
-------------- --------------

Total Liabilities and Shareholders' Equity $ 2,423.2 $ 2,656.9
============== ==============
</TABLE>


See Accompanying Independent Auditors' Report.
SCHEDULE II

UNITRIN, INC.
PARENT COMPANY STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Dollars in Millions)
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------
1999 1998 1997
----------- ----------- ------------
<S> <C> <C> <C>
Operating Activities:
Net Income $ 201.0 $ 510.8 $ 117.9
Adjustment Required to Reconcile Net Income
to Net Cash Provided by Operations:
Equity in Net Income of Subsidiaries and Investees (169.6) (518.5) (117.7)
Cash Dividends from Subsidiaries 7.5 26.0 181.1
Cash Dividends from Investee 2.3 2.3 2.2
(Gain) Loss on Sale of Investments (82.1) 2.5 -
Other, Net (132.6) 170.7 (95.8)
----------- ----------- ------------

Net Cash Provided (Used) by Operating Activities (173.5) 193.8 87.7
----------- ----------- ------------

Investing Activities:
Purchase of Securities from Subsidiaries:
Baker Hughes Common Stock - (310.0) -
Purchase of Common Stock (0.3) - -
Sale of Baker Hughes Common Stock 392.1
Redemption of Equity Securities - 47.5 -
Change in Short-term Investments 61.0 (79.2) (10.8)
Other, Net - (0.7) -
----------- ----------- ------------

Net Cash Provided (Used) by Investing Activities 452.8 (342.4) (10.8)
----------- ----------- ------------

Financing Activities:
Notes Payable Proceeds:
Revolving Credit Agreement 436.3 381.6 515.0
From Subsidiary - 450.0 -
Notes Payable Payments:
Revolving Credit Agreement (435.3) (356.6) (493.0)
Cash Dividends Paid (101.7) (100.7) (89.9)
Common Stock Repurchases (191.4) (232.9) (20.7)
Issuance of Unitrin Common Stock 12.8 7.2 11.7
----------- ----------- ------------

Net Cash Provided (Used) by Financing Activities (279.3) 148.6 (76.9)
----------- ----------- ------------

Increase (Decrease) in Cash - - -
Cash, Beginning of Year - - -
----------- ----------- ------------

Cash, End of Year $ - $ - $ -
=========== =========== ============
</TABLE>

See Accompanying Independent Auditors' Report.
SCHEDULE II
UNITRIN, INC.
PARENT COMPANY STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Dollars in Millions)

<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Net Investment Income $ 2.7 $ 2.4 $ 5.5
Net Gains (Losses) on Sales of Investments 82.1 (2.5) -
---------- ---------- ----------
Total Revenues 84.8 (0.1) 5.5
---------- ---------- ----------

Interest Expense 38.8 14.1 10.0
Other Operating (Income) Expenses (1.6) (1.4) (2.7)
---------- ---------- ----------
Total Operating Expenses 37.2 12.7 7.3
---------- ---------- ----------

Income (Loss) Before Income Taxes and Equity
in Net Income of Subsidiaries and Investees 47.6 (12.8) (1.8)

Income Tax (Benefit) Expense 16.2 (5.1) (2.0)
---------- ---------- ----------

Income (Loss) Before Equity in
Net Income of Subsidiaries and Investees 31.4 (7.7) 0.2

Equity in Net Income of Subsidiaries and Investees 169.6 518.5 117.7
---------- ---------- ----------

Net Income $ 201.0 $ 510.8 $ 117.9
========== ========== ==========
</TABLE>


See Accompanying Independent Auditors' Report.
SCHEDULE II

UNITRIN, INC.
PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(Dollars in Millions)

<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>

Net Income $ 201.0 $ 510.8 $ 117.9

Other Comprehensive Income:
Gross Unrealized Holding Gains (Losses) Arising During Year:
Securities Held by Subsidiaries (54.5) (11.5) 36.4
Securities Held by Parent 132.9 (59.8) 3.1
Other (2.0) 0.2 -
------------- ----------- -----------
Gross Unrealized Holding Gains (Losses) Arising During Year 76.4 (71.1) 39.5
Income Tax Benefit (Expense) (26.9) 25.0 (14.0)
------------ ----------- -----------
Unrealized Holding Gains (Losses) Arising During Year, Net 49.5 (46.1) 25.5
------------ ----------- -----------

Reclassification Adjustment for Gross (Gains) Losses Realized in Net Income:
Securities Held by Subsidiaries (29.5) (66.9) (2.5)
Securities Held by Parent (82.1) 2.5 -
------------ ----------- -----------
Reclassification Adjustment for Gross Gains Realized in Net Income (111.6) (64.4) (2.5)
Income Tax Expense 39.1 22.0 0.9
------------ ----------- -----------
Reclassification Adjustment for Gains Realized in Net Income, Net (72.5) (42.4) (1.6)
------------ ----------- -----------
Other Comprehensive Income (23.0) (88.5) 23.9
------------ ----------- -----------

Total Comprehensive Income $ 178.0 $ 422.3 $ 141.8
============ =========== ===========
</TABLE>
See Accompanying Independent Auditors' Report.
SCHEDULE III
UNITRIN, INC. AND SUBSIDIARIES
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in Millions)

<TABLE>
<CAPTION>

Insurance Amortization
Claims Of Deferred
Net and Policy Other
Premiums Investment Policyholders' Acquisition Insurance
Premiums Written Income Benefits Costs Expenses
------------ ----------- ---------- -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1999:
Life and Health (1) $ 713.2 $ N/A $ 164.8 $ 406.4 $ 74.2 $ 300.0
Property and Casualty 660.1 656.7 47.0 482.7 88.9 115.3
Other - N/A (8.8) - - (4.8)
----------- ---------- ----------- ----------- ---------- ----------

Total $ 1,373.3 $ N/A $ 203.0 $ 889.1 $ 163.1 $ 410.5
=========== ========== =========== =========== ========== ==========

Year Ended December 31, 1998:
Life and Health (1) $ 580.0 $ N/A $ 143.1 $ 326.2 $ 50.5 $ 275.3
Property and Casualty 648.3 608.2 43.5 455.6 98.8 92.6
Other - N/A (0.2) - - (9.5)
----------- ---------- ----------- ----------- ---------- ----------

Total $ 1,228.3 $ N/A $ 186.4 $ 781.8 $ 149.3 $ 358.4
=========== ========== =========== =========== ========== ==========

Year Ended December 31, 1997:
Life and Health (1) $ 499.1 $ N/A $ 124.6 $ 275.3 $ 55.3 $ 230.5
Property and Casualty 722.9 732.3 51.6 504.8 112.1 94.4
Other - N/A 3.3 - - (11.9)
----------- ---------- ----------- ----------- ---------- ----------
Total $ 1,222.0 $ N/A $ 179.5 $ 780.1 $ 167.4 $ 313.0
=========== ========== =========== =========== ========== ==========
</TABLE>


<TABLE>
<CAPTION>

Deferred
Policy
Acquisition Insurance Unearned
Costs Reserves Premiums
--------------- ------------ -------------
<S> <C> <C> <C>
Year Ended December 31, 1999:
Life and Health (1) $ 276.9 $ 2,097.5 $ 30.9
Property and Casualty 47.3 520.6 310.5
Other - - -
---------- ------------ ------------

Total $ 324.2 $ 2,618.1 $ 341.4
========== =========== ===========

Year Ended December 31, 1998:
Life and Health (1) $ 296.7 $ 2,086.2 $ 30.4
Property and Casualty 35.3 440.5 232.8
Other - - -
---------- ------------ ------------

Total $ 332.0 $ 2,526.7 $ 263.2
========== =========== ===========


</TABLE>

(1) The Company's Life and Health Insurance employee-agents also market certain
property and casualty insurance products under common management. Accordingly,
the Company includes the results of these property and casualty insurance
products in its Life and Health Insurance segment.

See Accompanying Independent Auditors' Report.
SCHEDULE IV

UNITRIN, INC.
REINSURANCE SCHEDULE
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 and 1997
(Dollars in Millions)
<TABLE>
<CAPTION>
Percentage
Ceded to Assumed of Amount
Gross Other from Other Net Assumed to
Amount Companies Companies Amount Net
---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1999:
- -----------------------------
Life Insurance in Force $ 21,307.7 $ 1,505.1 $ - $ 19,802.6 -

Premiums
Life Insurance $ 416.4 $ 3.2 $ - $ 413.2 -
Accident and Health Insurance 223.9 6.0 0.1 218.0 0.0%
Property and Liability Insurance 670.4 24.4 96.1 742.1 12.9%
---------- --------- -------- ---------- ----------
Total Premiums $ 1,310.7 $ 33.6 $ 96.2 1,373.3 7.0%
========== ========= ======== ========== ==========

Year Ended December 31, 1998:
- -----------------------------
Life Insurance in Force $ 21,221.4 $ 1,567.2 $ - $ 19,654.2 -

Premiums
Life Insurance $ 378.1 $ 2.1 $ - $ 376.0 -
Accident and Health Insurance 140.7 5.4 0.2 135.5 0.1%
Property and Liability Insurance 651.2 16.2 81.8 716.8 11.4%
---------- --------- -------- ---------- ----------
Total Premiums $ 1,170.0 $ 23.7 82.0 $ 1,228.3 6.7%
========== ========= ======== ========== ==========

Year Ended December 31, 1997:
- -----------------------------
Life Insurance in Force $ 17,709.2 $ 1,797.8 $ - $ 15,911.4 -

Premiums
Life Insurance $ 350.7 $ 19.8 $ - $ 330.9 -
Accident and Health Insurance 119.1 3.3 - 115.8 -
Property and Liability Insurance 697.9 18.0 95.4 775.3 12.3%
---------- --------- -------- ---------- ----------
Total Premiums $ 1,167.7 $ 41.1 95.4 $ 1,222.0 7.8%
========== ========= ======== ========== ==========
</TABLE>

See Accompanying Independent Auditors' Report.
POWER OF ATTORNEY

Each person whose signature appears below hereby appoints each of Richard
C. Vie, Chairman of the Board, President and Chief Executive Officer, Eric J.
Draut, Senior Vice President, Treasurer and Chief Financial Officer, and Scott
Renwick, General Counsel and Secretary, his true and lawful attorney-in-fact
with authority together or individually to execute in the name of each such
signatory, and with authority to file with the Securities and Exchange
Commission, any and all amendments to this Annual Report on Form 10-K of
Unitrin, Inc., together with any and all exhibits thereto and other documents
therewith, necessary or advisable to enable Unitrin, Inc. to comply with the
Securities Exchange Act of 1934, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission in respect thereof, which
amendments may make such other changes in the Annual Report on Form 10-K as the
aforesaid attorney-in-fact executing the same deems appropriate.

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, Unitrin, Inc. has duly caused this Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on February 2, 2000.

UNITRIN, INC.
(Registrant)

By: /S/ Richard C. Vie
------------------
Richard C. Vie
Chairman of the Board, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Unitrin, Inc.
in the capacities indicated on February 2, 2000.

<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/S/ Richard C. Vie Chairman of the Board, President, Chief Executive Officer
- ------------------ and Director
Richard C. Vie

/S/ Eric J. Draut Senior Vice President, Treasurer and Chief Financial Officer
- ----------------- (principal financial officer)
Eric J. Draut

/S/ Richard Roeske Corporate Controller
- ------------------ (principal accounting officer)
Richard Roeske

/S/ James E. Annable Director
- --------------------
James E. Annable

/S/ Reuben L. Hedlund Director
- ---------------------
Reuben L. Hedlund

/S/ Jerrold V. Jerome Director
- ---------------------
Jerrold V. Jerome

/S/ William E. Johnston, Jr. Director
- ----------------------------
William E. Johnston, Jr.

/S/ George A. Roberts Director
- ---------------------
George A. Roberts

/S/ Fayez S. Sarofim Director
- --------------------
Fayez S. Sarofim
</TABLE>

15