The insurer that suffered striking losses last year and backed out of potential agreements has a new strategy.
The Zurich insurance company has now come up with a new strategy to help to recover from a rough period throughout 2014 to 2015 and has revealed that it intends to spend over $1 billion in the purchase of an American agricultural insurer.
This is a component of the insurer’s new strategy for acquisitions after having stepped back from RSA in the U.K.
Earlier in December, the insurance company’s CEO chose to step down, adding further shakeup to the company that had already been seeing some serious unwanted changes throughout the year. Now, the insurer has announced that it will be buying Rural Community Insurance Services (RCIS), which currently belongs to Wells Fargo, the financial services group in the United States. This is a part of a larger effort to broaden the company’s commercial business.
RCIS is an insurance company that is in operation across the U.S., and wrote $2.1 billion gross premiums in 2014.
The worldwide insurance industry has been experiencing a considerable trend toward consolidation throughout 2015. Zurich had been intending to be a major part of that trend when it found itself backing out of the pursuit of RSA from the United Kingdom following some strong unwanted numbers in its general insurance business earlier this year, in September. That said, it has now created a new strategy that has kept it inside the trend with a much lower bid than its original £5.6 billion for RSA.
The company decided to tackle its general insurance business problems before making a massive investment into a new acquisition. This issue was compounded when CEO Martin Senn stepped down at the start of the month. Despite the fact that a successor for Senn has not yet been announced by Zurich, it has been working on its new strategy and is now well on the way to implementing it.
The insurance company has said that it intends to hire a new CEO from outside the group. The insurer has an estimated $3 billion in excess capital and it is believed that it will be the source of the money for this acquisition.