zurich_Logo_4c [Konvertiert]Zurich Insurance Group closed its acquisition of America’s leading agriculture insurer, a deal that gives it a much larger stake in the sector at a time when it is trying to diversify operations.

Zurich subsidiary Zurich American Insurance Company bought Rural Community Insurance Agency and Rural Community Insurance Company from Wells Fargo & Co. for $700 million, though the deal was valued as much as $1.05 billion when it was first announced in December 2015.

Zurich noted that it has been in the U.S. crop insurance business – a market worth more than $10 billion – for over 20 years. But the acquisition greatly expands the scope of its involvement in the space, from a reinsurer into a 100 percent owner of an Approved Insurance Provider through the Federal Crop Insurance Program.

There’s also a much bigger market share. When news of the deal first broke in December, Bloomberg reported that Zurich’s acquisition leaves it with a 20 percent share of a highly regulated market.

With the sale complete, RCIS becomes a standalone unit within Zurich North America Commercial’s Programs and Direct Markets business unit. Also, RCIS will continue to offer federal crop insurance programs and private crop insurance products. RCIS will also continue with its national network of more than 3,800 agents that provide risk management for more than 130 varieties of crops on more than 90 million acres.

Bringing on RCIS to Zurich is designed to help diversify its general insurance business, a struggling division that produced a $424 million loss and a 103.6 combined ratio in the 2015 fourth quarter. Losses came from winter storms in the U.K. , a port explosion in China and other large catastrophe events. U.S. auto liability, global corporate property and North America commercial construction liability has also caused problems.

New CEO Mario Greco came on board in March with a mission to cut costs and overhaul operations. The goal is to achieve more than $1 billion in cost savings by the end of 2018, an effort that will affect about 8,000 employees.

Source: Zurich Insurance Group