USI Insurance Services announced the closing on its acquisition of Wells Fargo Insurance Services USA (WFIS), formerly part of Wells Fargo & Co.
This purchase includes the commercial insurance brokerage and consulting, employee benefits and property/casualty insurance national practices of WFIS, along with its Safehold Special Risk, small business insurance, student insurance, individual health and private risk management business lines. Terms were not disclosed.
The plan to sell the business to USI was announced in June. In May, Bloomberg had reported that Alliant Insurance Services was also in the running along with USI to buy the business for as much as $2 billion.
Wells Fargo Insurance Services writes or places about $9 billion worth of premiums annually, according to its website.
USI, headquartered in Valhalla, New York, has more than $1.0 billion in revenue, employs more than 4,400 professionals and operates out of 140 local offices serving every state.
Wells Fargo has said it is exiting the insurance business to focus on its core banking business.
Wells Fargo’s personal lines insurance unit is not part of the sale to USI. However, Wells Fargo announced last week that it is winding down its personal insurance business. The company said the exit process should be finished during the first quarter of 2018.
On November 9, 2017, Wells Fargo Insurance agreed to sell its crop insurance broker business to Hub International Limited, a global insurance brokerage.
This is not the first transaction between Wells Fargo and USI Insurance Services. In 2014, Wells Fargo sold 42 of its smaller regional insurance locations representing about 40 percent of its insurance brokerage locations to USI. The remaining 55 locations are in larger markets that generate more than 90 percent of brokerage revenue, Laura Schupbach, head of Wells Fargo Insurance, said at the time of that transaction.
Wells Fargo has been dealing with several insurance-related probes, on top of its major scandal in which employees created fake bank accounts in order to achieve sales goals. The insurance probes have to do with alleged unwanted placement of insurance for car loan customers and sales of so-called gap coverage that covers the difference between what a customer owes on a car loan and the value an insurance company will give to the customer if the car is destroyed in an accident or stolen.