Wells Fargo sells Anoka-based crop insurance unit to Zurich Insurance Group

Dec. 18--Zurich Insurance Group emerged as the winning bidder for Rural Community Insurance Services, the Anoka-based crop insurance unit of Wells Fargo & Co. that had been on the block for several months, the companies announced Friday.

Under the agreement, Wells Fargo will sell the business for $675 million, plus the amount of excess capital in RCIS at the time of closing. That's expected to be as much as $375 million, driving the overall value of the transaction to around $1 billion. Specific terms weren't disclosed.

RCIS is one of the nation's largest crop insurance firms and had about $2.1 billion in gross written premiums last year. Wells Fargo put the business up for sale last summer after it endured weather-related losses. The company, along with other major banks, have been under pressure to exit some of their more risky businesses.

The company is a relatively small business inside Wells Fargo, the nation's fourth-largest bank by assets. But RCIS is a leading provider of crop insurance, employing 4,000 agents across the country and offering policies on about 130 varieties of crops that today cover more than 90 million acres.

"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," Mike Foley, chief executive of Zurich's North America operations, said in a statement. "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 and RCIS have done business together since 1992 with its Zurich Insurance America unit responsible for about 25 percent of RCIS' retained premiums through a quota share contract.

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