Zurich Completes Acquisition of RCIS Crop Insurance Business

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

The two crop businesses, which are collectively known as Rural Community Insurance 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 N.A.’s Commercial Programs & Direct Markets business unit.

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 Insurance Services and the Crop Insurance 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 Insurance Provider through the Federal Crop Insurance Program.

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 Insurance Group for an undisclosed amount. Last August, OneBeacon Insurance Group exited the crop insurance business when it sold Climate Crop Insurance Agency to AmTrust Financial Services. Also, HCC Insurance Holdings Inc. agreed in 2014 to buy Producers Ag Insurance Group from CUNA Mutual Group, while Farmers Mutual Hail Insurance Co. of Iowa reached a deal to buy Deere & Co.’s crop-insurance unit.

Topics Mergers & Acquisitions Agribusiness