Wells Fargo & Co is restarting efforts to expand its insurance brokerage business through acquisitions after previously announced M&A aspirations did not pan out.
Laura Schupbach, executive vice president and head of Wells Fargo Insurance, said she “hit the pause button” on plans to do deals after she determined when taking the reins of the business four years ago that existing businesses were not fully integrated after earlier deals over a period of about 15 years.
Schupbach cited technology platforms and contracts with insurance carriers as examples of inconsistencies that have now been addressed across the bank’s 2500 person insurance brokerage and consulting unit.
Having resolved those issues and “upgraded talent,” Wells Fargo is again looking at M&A, Schupbach said in an interview.
“We’re very interested in building out industry expertise,” Schupbach said last week. She cited industries including healthcare, hospitals and agriculture as possible targets. In terms of size of a deal, she said Wells Fargo would prefer to target larger companies as they are “used to serving clients with more sophisticated needs.”
On the low end, Schupbach said “Could it be $20-50 million? Maybe.” She declined to comment regarding the possible high end of the range and added that she can grow the business without acquisitions if necessary.
Wells told Reuters in August it is selling its crop insurance business, thought to be valued at $1 billion. Wells announced a $1.05 billion deal with Zurich Insurance for the sale of the crop insurance business last Friday.
Elaborating on those plans, Schupbach said Wells targeted the business for sale because it does not provide as much opportunity as the bank’s other insurance business lines to serve bank consumer and commercial customers.
(Reporting by Dan Freed; Editing by Andrew Hay)
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