The firm announced its intention to exit this sector and will start phasing out marketing immediately.
Wells Fargo & Co announced it will be leaving the personal insurance business and will start reducing its marketing in that area. The exit from that market should be complete at some point during the first quarter of next year.
Until it has fully exited the personal insurance space, it will continue selling and supporting those products.
The company has stated that it intends to keep making personal insurance products available until it completely exits that business. It will also continue to provide service for those products. The types of coverage that it has been selling within that insurance business includes homeowners, renters, auto and umbrella policies. It has been a part of this insurance product space since 2003.
That said, over the last year it has faced a number of major scandals regarding its practices in this area. To some, it is not surprising that the company would choose to back out of personal coverage following those struggles and several others over the past while. It is only the most recent step the company is taking in order to shake off its insurance operations.
Wells Fargo’s personal insurance unit is the last of the company’s brokerage agencies within its portfolio.
“Wells Fargo continually reviews our product and service offerings to ensure they meet our customers’ needs and align with the company’s long-term strategic goals,” said Wells Fargo Personal Insurance head, Laurie Nordquist.
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The company said that in the scheme of its portfolio as a whole, the financial contributions from its insurance brokerage agency was no longer relevant. It also pointed out that this decision does not change the company’s life insurance practice within its Wealth and Investment Management branch.
Wells Fargo has been gradually working its way out of the insurance sector as a whole. Back in December 2015, for example, the company announced that it was selling Rural Community Insurance Services, its crop insurance business. At the same time, it sold its Rural Community Insurance Company subsidiary. They were both acquired by Zurich American Insurance Company, a Zurich Insurance Group subsidiary, in 2016.
In June of this year, Wells Fargo sold its commercial insurance business to USI Insurance Services. Leaving the personal insurance space was the natural next step, particularly when considering the challenges the company has faced in that arena.