Zurich in advanced discussions over SG$5.4 billion P&C deal

Insurance heavyweight moves for insurer's embattled US division

Zurich in advanced discussions over SG$5.4 billion P&C deal

Insurance News


In a potential tie-up that some Wall Street analysts, according to the WSJ, call “a good deal” for MetLife shareholders, Zurich Insurance Group has confirmed that it is in advanced negations through its Farmers Group to acquire MetLife’s auto and home insurance unit. A Reuters report suggests the deal could fetch around US$4 billion (around SG$5.4 billion).

While MetLife has been expanding its benefits programs, having recently agreed to buy vision insurer Versant Health for US$1.7 billion, its P&C division has suffered strong competition from competitors like GEICO, Progressive and State Farm.

The deal comes after a poor third quarter for MetLife’s P&C division – adjusted earnings at its US property and casualty arm slumped 68% to just US$18 million on US$3.7 billion of premiums, 66% of which was from auto coverage, with the remaining third being home insurance. The poor results followed the company’s biggest natural catastrophe losses in a decade, which overwhelmed the improvement in auto claims during the COVID pandemic.

Although the insurer’s share price has nearly doubled from its March US$23 low, it is still languishing below the US$52 it reached in late February.

Farmers Insurance Group ranked 9th in the US for P&C premiums last year, accounting for just under 3% of the market.

How they stack up
Top 10 Property & Casualty Insurers by premiums written

1. State Farm US$65,615
2. Berkshire Hathaway US$46,107
3. Progressive US$39,223
4. Liberty Mutual US$35,600
5. Allstate US$35,025
6. Travelers US$28,016
7. USAA US$23,483
8. Chubb US$23,388
9. Farmers US$20,644
10. Nationwide US$18,442


Sources close to the negotiations have indicated that the plan is to announce the deal’s terms next month, as long as no unforeseen glitches arise.

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