Zurich to expand in North America by acquiring RCISStaff writer ▼ | December 19, 2015
Zurich Insurance Group said that its subsidiary Zurich American Insurance Company (ZAIC) has entered into an agreement with Wells Fargo & Company to acquire 100% of Rural Community Insurance Agency (RCIA) and its subsidiary Rural Community Insurance Company (RCIC).
Acquisition Rural Community Insurance Services to be sold
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 around $375 million.
The transaction value of around $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.
ZAIC began providing reinsurance to RCIS in 2000. It currently assumes 25 percent of RCIS’ ceded premiums through a quota share contract. 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 crops as new varieties emerge and developing new types of coverage when needed.
With a national network of over 4,000 agents, RCIS conducts business in all 50 U.S. states, providing risk management for more than 130 crops on over 90 million acres. The company is a member of National Crop Insurance Services and the Crop Insurance and Reinsurance Bureau, Inc.
Subject to applicable antitrust and insurance regulatory approvals as well as other customary closing conditions, the closing is expected to take place no later than the first quarter of 2016 with the business fully integrated into Zurich in 2017. ■