Switzerland’s Zurich Insurance coverage Group AG is in superior talks to amass MetLife Inc.’s U.S. property and casualty (P&C) automobile and residential insurance coverage unit for near $4 billion, based on individuals accustomed to the matter.
Zurich Insurance coverage issued a press release late on Friday confirming it was in discussions to amass MetLife’s U.S. property and casualty enterprise and cautioning that no deal was sure. It didn’t touch upon the worth of the deal.
The deal, executed by means of its Farmers Group Inc subsidiary, would increase Zurich Insurance coverage’s P&C enterprise, because the business grapples with fallout from the COVID-19 pandemic, which drove up claims for enterprise interruptions and occasion cancellations.
It will additionally permit MetLife to exit a enterprise by which it faces fierce competitors from bigger gamers resembling State Farm, GEICO and Progressive Insurance coverage.
Its P&C enterprise focuses extra on automobile insurance coverage, an space by which individuals have made fewer claims attributable to spending much less time on the street through the pandemic.
If the negotiations conclude efficiently, a deal might be introduced by early December, the sources mentioned.
MetLife declined to remark.
MetLife, whose choices additionally embrace life insurance coverage, worker advantages and asset administration, earlier this month reported a 68% drop in third-quarter adjusted earnings at its U.S. property and casualty division, to $18 million.
The decline was pushed by disaster losses brought on by storms in the US, it mentioned.
The New York-based firm’s chief govt, Michel Khalaf, mentioned throughout its newest quarterly earnings name that the P&C enterprise had “an essential strategic connection” to the remainder of MetLife, however declined to touch upon whether or not he would promote it.
MetLife has been turning to deal-making to maneuver into extra worthwhile areas.
It mentioned in September it will purchase vision-care advantages firm Versant Well being for $1.68 billion, which might make it the third-largest imaginative and prescient insurer in the US by membership, and introduced in December it will enter the pet insurance coverage market by buying PetFirst Healthcare.
Zurich Insurance coverage’s U.S. footprint at the moment contains Farmers Group, an administrator of insurance coverage insurance policies for Farmers Insurance coverage. Zurich Insurance coverage acquired Farmers Group in 1998, whereas Farmers Insurance coverage is owned by its policyholders.
Farmers Insurance coverage was the fifth- and seventh-largest supplier of residence and auto insurance coverage, respectively, in the US in 2019, based on knowledge supplier S&P International Market Intelligence. MetLife was 14th and 18th, respectively.
(Reporting by David French in New York Enhancing by Jan Harvey, Matthew Lewis and Sonya Hepinstall)
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