The US$3.94 billion (around £2.86 billion) sale of MetLife’s property and casualty business in the US has been finalised.
Announced last December, the now completed transaction saw the Farmers Exchanges pay US$1.51 billion while US$2.43 billion came from Zurich Insurance Group’s wholly owned subsidiary Farmers Group, Inc. (FGI).
It was noted that Zurich has no ownership interest in the Farmers Exchanges, and that FGI provides certain non-claims services and ancillary services to the Farmers Exchanges as its attorney-in-fact.
“We are very pleased that the acquisition has been approved so rapidly,” commented Zurich chief executive Mario Greco. “We expect the new business to contribute to growth beginning this quarter and start building on the leading positions that Zurich and the Farmers Exchanges have separately developed in the attractive US market.”
The deal spans a 10-year exclusive distribution agreement through which the Farmers Exchanges will offer its personal lines products on MetLife’s US group benefits platform, providing the Farmers Exchanges access to new distribution channels.
Meanwhile, FGI CEO Jeff Dailey had this to say: “The completion of this transaction represents a new milestone in our organisation's nearly 100-year history that will help accelerate growth, diversify our distribution, and position Farmers for the future.”
Additionally, according to Zurich, the swoop is expected to deliver a return on investment to the group of approximately 10% from 2023.