Zurich Insurance to Buy Wells Fargo Crop Insurance Business

By Digby Larner

Zurich Insurance Group AG has agreed to pay up to $1.05 billion for U.S. finance business Wells Fargo & Company's crop insurance business, as it attempts to overcome a tumultuous period in which it parted company with its chief executive.

Its Zurich American Insurance Company unit will buy Rural Community Insurance Services in a deal that is expected to close by the end of the first quarter of 2016.

The business is of the largest U.S. crop insurance providers, offering federal crop insurance programs that include multi-peril and other private crop insurance products.

Wells Fargo said the estimated purchase price of the business is between $675 million and $1.05 billion.

The move follows a difficult few months for Zurich Insurance, which recently called off a potential $8 billion bid to buy U.K.-based RSA Insurance Group PLC. At that same time, the company warned that it would report a weaker-than-expected third-quarter profit for general insurance.

Last month it reported a 79% decline in third-quarter net profit, and an operating loss of $183 million at its general insurance business in the period, where it said it planned to cut roughly 200 jobs.

At the beginning of December, the company said Chief Executive Martin Senn would step down by the end of the year. He is being replaced on an interim basis by Chairman Tom de Swaan while a permanent successor is sought.

Write to Digby Larner at digby.larner@wsj.com

(END) Dow Jones Newswires

December 18, 2015 02:46 ET (07:46 GMT)

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