Wells Fargo Enters Agreement with Zurich to Sell Crop Insurance Business
December 18, 2015 01:00 AM Eastern Standard Time
“ 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,” said Laura Schupbach, head of Wells Fargo Insurance. “ We have tremendous opportunity to provide our consumer and commercial customers the insurance and risk management solutions they need and we continue to invest in the business.”
Wells Fargo Insurance serves consumer and commercial customers through its two distribution businesses, Insurance Brokerage and Consulting (IBC) and Personal and Small Business Insurance (PSBI). IBC provides middle market, large corporate and high net worth clients with property and casualty, professional risk, employee benefits, private risk solutions and targeted insurance programs to specialized industries. PSBI provides retail and small business customers with access to personal and business insurance products including auto, home, umbrella, renters and small business insurance.
As one of the nation’s largest crop insurance providers, RCIS offers federal crop insurance programs, including multi-peril and other private crop insurance products. With a national network of more than 4,000 agents, RCIS conducts business in all 50 U.S. states and is a member of National Crop Insurance Services and the Crop Insurance and Reinsurance Bureau, Inc.
Zurich is a leading multi-line insurer that offers a wide range of general insurance and life insurance products and services to individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. Zurich has been doing business in the U.S. for over a hundred years, and is a top five commercial property-casualty insurance provider serving global corporate, large corporate, middle market, specialties and programs sectors through the individual member companies of Zurich in North America, including ZAIC. Since 2000, ZAIC has been a reinsurance provider to RCIS and currently assumes 25 percent of RCIS’ retained premiums through a quota share contract.
“ Wells Fargo and Zurich have a long standing history of working together and we are confident they will provide great service and support to our agriculture customers and RCIS team members,” said Schupbach.
Under the agreement, the estimated purchase price is between $675 million – $1.05 billion. Additional financial details related to the transaction, including the amount of expected gain to Wells Fargo, were not disclosed. RCIS’s annual operating results are not material to Wells Fargo.
Wells Fargo Securities served as exclusive financial advisor to Wells Fargo Insurance in connection with the transaction, which does not include the Wells Fargo Insurance Crop Agency.
About Wells Fargo Company
Wells Fargo Company (NYSE: WFC) is a diversified, community-based financial services company with $1.8 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo Company was ranked No. 30 on Fortune’s 2015 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With more than 55,000 employees, it provides a wide range of general insurance and life insurance products and services. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.
In North America, Zurich is a leading commercial property-casualty insurance provider serving the global corporate, large corporate, middle market, specialties and programs sectors through the individual member companies of Zurich in North America, including Zurich American Insurance Company. Life insurance and disability coverage issued in the United States in all states except New York is issued by Zurich American Life Insurance Company, an Illinois domestic life insurance company. In New York, life insurance and disability coverage is issued by Zurich American Life Insurance Company of New York, a New York domestic life insurance company. For more information about the products and services it offers and people Zurich employs around the world go to www.zurichna.com 2012 marked Zurich’s 100-year anniversary of insuring America and the success of its customers, shareholders and employees.
This news release contains forward-looking statements about our future financial performance and business. Because forward-looking statements are based on our current expectations and assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.