Zurich American Insurance Company (“ZAIC”), a subsidiary of Zurich Insurance Group, has entered into an agreement with Wells Fargo & Company 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”).
“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, the chief executive officer of 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.”
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.
“Working in an industry with a high exposure to weather conditions, most farmers wouldn't think of operating without some form of crop insurance,” Mr. 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.
Willkie Farr & Gallagher LLP represented Zurich American Insurance Company. The Willkie deal team was led by partner Thomas Cerabino and included partner Rajab Abbassi, special counsel Elizabeth Bannigan, and associate Laura Acker. The Zurich in-house team was led by Dennis F. Kerrigan Jr., the executive vice-president, general counsel, and corporate secretary of Zurich North America, and Douglas Hatlestad, the vice president and senior assistant general counsel of Zurich North America.
Learn more: www.zurich.com; wellsfargo.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].