Alliant Insurance Services Inc. has emerged as the front-runner to buy Wells Fargo & Co.’s insurance business, people familiar with the matter said.
The San Francisco-based bank could announce a sale of its Wells Fargo Insurance Services USA brokerage within weeks, said the people, who asked not to be identified because the matter isn’t public. A deal hasn’t been completed and the talks could fall through, they said.
USI Insurance Services LLC, another large brokerage, is also pursuing the company, the people said.
It isn’t clear how much Wells Fargo might fetch for the business. People familiar with the matter said in May that it could be worth about $2 billion.
Wells Fargo, the largest U.S. retail bank by branch count, is selling the division as part of a strategy to boost profit by exiting some businesses. It’s also looking to take advantage of a takeover boom in the insurance brokerage market driven by private equity firms angling to consolidate the fragmented sector. KKR & Co. and a Canadian pension fund, Caisse de Depot et Placement du Quebec, agreed in March to buy USI Insurance in a deal that valued the insurer at $4.3 billion, including debt.
Mark Folk, a Wells Fargo spokesman, declined to comment. Alliant and USI didn’t respond to requests for comment.
Stone Point Capital bought a stake in Newport Beach, California-based Alliant in 2015 from KKR to become the insurer’s largest institutional shareholder, with KKR retaining a minority stake, according to a statement at the time.
Wells Fargo Insurance Services was the seventh-largest insurance broker in the U.S. at the end of 2015 as measured by revenue, according to the trade publication Business Insurance. USI ranked ninth and Alliant was 12th. With the Wells Fargo business, Alliant would leapfrog to fifth place based on that ranking.
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