(Bloomberg) — Deere & Co., the world's largest manufacturer or agricultural machinery, agreed to sell its crop insurance segment to Farmers Mutual Hail Insurance Co. of Iowa, retreating from a business that suffered years of losses.

The sale comprises John Deere Insurance Co. and John Deere Risk Protection, Moline, Illinois-based Deere said today in a statement. No terms were disclosed.

The West Des Moines, Iowa-based buyer, which was founded in 1893, is counting on more demand as farm production expands to meet the needs of a growing population. Companies including Wells Fargo & Co. and Ace Ltd. historically profited through the coverage, which is partly backed by U.S. taxpayers. Deere's push into multiple peril crop insurance, or MPCI, was followed by record drought and a plunge of corn prices, which fueled higher- than-expected claims in 2012 and 2013.

"MPCI has traditionally been very profitable," Marc Liebowitz, a senior financial analyst for A.M. Best Co., said in an interview before the sale was announced. "In the last few years, one thing or another has impacted the results."

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

E&S/Specialty