Zurich Insurance to buy MetLife’s property & casualty business for $3.94bn

Zurich Insurance said on Thursday that it has agreed, along with the Farmers Exchanges, to buy MetLife’s property and casualty business in the US for $3.94bn.

The deal will give the Farmers Exchanges "a truly nationwide presence" and access to new distribution channels with the potential to accelerate growth, Zurich said. This includes a 10-year exclusive distribution agreement through which the Farmers Exchanges will offer their personal lines products on MetLife’s US Group Benefits platform, which reaches 3,800 companies and 37m employees.

Zurich chief executive officer Mario Greco said: "The acquisition significantly increases the potential for growth at the Farmers Exchanges and will further boost the share of Zurich’s profits linked to stable fee-based earnings. Together with the continued increase in rates in commercial insurance, this transaction will strengthen our ability to achieve our 2022 targets."

The acquisition is expected to contribute to Zurich’s earnings from the first full year after completion and to deliver a return on investment of around 10% from 2023.

The deal is expected to complete in the second quarter of next year.