Wells Fargo Sells Anoka-Based Crop Insurance Business For Up To $1B
Wells Fargo & Co. will sell its crop-insurance business for as much as $1.05 billion to Switzerland-based Zurich Insurance Group, a deal that is said to give Zurich control of 20 percent of the intensely regulated insurance market.
Zurich’s purchase of the Anoka-based Rural Community Insurance Services (RCIS) unit will provide the Swiss insurer with $1.6 billion in net earned premiums by 2017, as reported by Bloomberg. San Francisco-based Wells Fargo will receive $675 million plus the amount of excess capital in RCIS at the close of the deal, which carries an estimated worth of $375 million.
RCIS works nationally with more than 4,000 agents across all 50 states providing insurance for 137 types of crops.
Wells Fargo began shopping its crop insurance business back in August with a more than $1 billion price tag. Laura Schupbach, head of Wells Fargo Insurance, said in a statement, “the sale of our long standing crop insurance business allows us to focus on and strengthen our distribution businesses, which account for approximately two-thirds of our insurance revenue.”
For the first six months of 2015, RCIS was hemorrhaging $7.98 million, a more than 100 decrease after reporting $3.24 million in losses for the same period in 2014.
The Wells Fargo-Zurich deal is pending regulatory approval, but is expected to close by the end of first quarter 2016.