Zurich to Grow U.S. Operations by Acquiring Crop Insurer RCIS

Acquisition expands Zurich’s existing portfolio of products and services, strengthening a top five position in the U.S. commercial insurance market

SCHAUMBURG, Ill.--(BUSINESS WIRE)-- Zurich American Insurance Company (ZAIC), a subsidiary of Zurich Insurance Group, has entered into an agreement with Wells Fargo & Company (NYSE: WFC) under which it will acquire 100 percent of Rural Community Insurance Agency, Inc. (RCIA) and its subsidiary Rural Community Insurance Company (RCIC). The two are collectively known as Rural Community Insurance Services (RCIS), one of the nation’s largest crop insurance providers, recording approximately $2.1 billion in gross written premiums in 2014. The acquisition expands and diversifies Zurich’s portfolio of commercial insurance products and services in North America.

“Zurich has been a part of American business for more than 100 years, and that means we understand the importance of farmers and the agriculture industry to the American economy,” said Mike Foley, CEO North America Commercial and regional chairman of North America. “This acquisition adds an exciting new chapter to our long history in the U.S. and illustrates how financial discipline allows us to capitalize on market opportunities that meet our strategic objectives.”

Zurich began its relationship with RCIS in 1992 and currently assumes 25 percent of RCIS’ retained premiums through a quota share contract. This long term working collaboration has provided Zurich with a deep understanding of the crop insurance industry, the exposures in the crop program and RCIS as a business.

RCIS offers federal crop insurance programs including multi-peril (“MPCI”) and other private crop insurance products. Since 1982 RCIS has helped reshape the privatized crop insurance business by offering a comprehensive line of insurance products and services to meet the unique requirements of producers, adding policies as new crop varieties emerge and developing new types of coverage when needed. With a national network of more than 4,000 agents, RCIS conducts business in all 50 U.S. states, providing risk management for more than 130 varieties of crops on more than 90 million acres. The company is a member of National Crop Insurance Services and the Crop Insurance and Reinsurance Bureau, Inc.

“Working in an industry with a high exposure to weather conditions, most farmers wouldn't think of operating without some form of crop insurance,” Foley added. “These products and services help America’s agricultural producers stay competitive and be more innovative, as well as to have the financial security to stay in business and go on to plant the next season. RCIS has a national distribution footprint with highly tenured agents and an outstanding service reputation, insuring one in six farmers in the U.S.”

Zurich will pay Wells Fargo approximately $675 million plus the amount of excess capital in RCIS at the date of closing, estimated to be up to $375 million. The payment of approximately $675 million represents deployment of part of the group’s $3 billion excess capital, which, as Zurich has previously stated, will be invested in the business or returned to investors by the end of 2016.

Zurich continues to prioritize investments in distinctive positions, investing in the businesses and customer segments where it sees the best opportunities for growth. The expansion of commercial lines capabilities is one of its strategic priorities.

Subject to applicable antitrust and insurance regulatory approvals as well as other customary closing conditions, the closing is expected to take place in the first quarter of 2016 with the business fully integrated into Zurich in 2017.

Wells Fargo & Company (NYSE: WFC) is a nationwide, 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.

About Zurich

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151217006663/en/

Zurich North America
Robyn Ziegler, 847-605-7580
[email protected]
cell: 708-261-1063

Source: Zurich Insurance Group Ltd

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