(Reuters) – Switzerland Zurich Insurance Group AG is in advanced talks to acquire MetLife Inc's US real estate / accident and home insurance unit for close to $ 4 billion, according to people familiar with the matter. The
deal, conducted through its subsidiary Farmers Group Inc., was to expand Zurich Insurance & # 39 ;s real estate / accident business, as the industry struggled with the COVID-19 pandemic, which fueled allegations of business interruptions and disruptions.
It would also allow MetLife to leave a company where it faces stiff competition from major players such as State Farm, GEICO and Progressive Insurance.
Its real estate / claims company focuses more on car insurance, an area where people have made fewer claims due to spending less time on the road during the pandemic.
If the negotiations are completed successfully, an agreement can be announced in early December, the sources said.
MetLife declined to comment, while Zurich did not respond to a request for comment.
MetLife, whose offerings also include life insurance, employee benefits and asset management, previously reported 68% of the third quarter adjusted earnings for its US real estate / claims division. to $ 1
The decline was driven by catastrophic losses caused by storms in the United States, it said.
The CEO of the New York-based company, Michel Khalaf, said during his recent quarterly income talk that the property / damage company had "an important strategic connection" to the rest of MetLife, but declined to comment on whether he would sell it.
MetLife has turned to dealmaking to move to more profitable areas.
It announced in September it would buy vision-care distributor Versant Health for $ 1.68 billion, making it the third largest vision insurance company in the United States through membership, and announced in December that it would enter the pet insurance market. y acquires PetFirst Healthcare.
Zurich Insurance US footprints currently include the Farmers Group, an insurance administrator for Farmers Insurance. Zurich Insurance acquired Farmers Group in 1998, while Farmers Insurance is owned by its policyholders.
Farmers Insurance was the fifth and seventh largest home and car insurance provider in the United States in 2019, according to the data provider. S&P Global Market Intelligence. MetLife was 14th and 18th, respectively.
More insurance and risk management news about the coronavirus crisis here . Catalog