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Zurich American ÈȵãºÚÁÏ Co. said it has completed its acquisition of Rural Community ÈȵãºÚÁÏ Agency (RCIA) and its subsidiary Rural Community ÈȵãºÚÁÏ Co. (RCIC) from Wells Fargo ÈȵãºÚÁÏ for $700 million.

The two crop businesses, which are collectively known as Rural Community ÈȵãºÚÁÏ Services (RCIS), are among the country’s biggest crop insurance providers, recording approximately $1.9 billion in gross written premiums in 2015, or about 20 percent of the estimated $10 billion market.

RCIS will now operate as a stand-alone unit within Zurich North America Commercial’s Programs & Direct Markets (P&DM) business unit. RCIS will continue to focus on meeting customer needs and providing the best possible service.

RCIS will continue to offer federal crop insurance programs and private crop insurance products. RCIS has a network of more than 3,800 agents, conducting business in all 50 U.S. states. It continues to hold memberships with National Crop ÈȵãºÚÁÏ Services and the Crop ÈȵãºÚÁÏ and Reinsurance Bureau, Inc.

Zurich has been in the U.S. crop insurance business for more than 20 years, including a relationship with RCIS. The acquisition shifts its long-standing position from a reinsurer into a 100 percent owner of an Approved ÈȵãºÚÁÏ Provider (AIP) through the Federal Crop ÈȵãºÚÁÏ Program.

Zurich entered into an agreement with RCIS owner Wells Fargo & Co. last December to acquire the crop insurance units.

At the time of the December announcement, the Swiss firm had estimated the price would be more than $1 billion, or $675 million plus the amount of excess capital in the insurance unit when the deal closed, which at the time was estimated to be as much as $375 million.

“The sale of our long-standing crop insurance business allows us to focus on and strengthen our distribution businesses, which account for approximately two-thirds of our insurance revenue,” Laura Schupbach, head of Wells Fargo ÈȵãºÚÁÏ, said at the time of the December agreement.

The Zurich-Wells Fargo transaction is one deal among a number that is reshaping the specialty crop insurance marketplace.

Last December, Cargill Inc. agreed to sell its crop insurance unit to Silveus ÈȵãºÚÁÏ Group for an undisclosed amount. Last August, OneBeacon ÈȵãºÚÁÏ Group exited the crop insurance business when it sold its managing general agency – Climate Crop ÈȵãºÚÁÏ Agency – to AmTrust Financial Services.

Zurich joins HCC ÈȵãºÚÁÏ Holdings Inc. and Starr Cos. in expanding into crop insurance. Also HCC agreed in 2014 to buy Producers Ag ÈȵãºÚÁÏ Group from CUNA Mutual Group, while Farmers Mutual Hail ÈȵãºÚÁÏ Co. of Iowa reached a deal to buy Deere & Co.’s crop-insurance unit.

Topics Mergers & Acquisitions Agribusiness