Zurich uses excess capital to buy farm insurer

Acquisition 450

Zurich has made its first acquisition since the deal to buy RSA fell through, purchasing a US agricultural insurer for up to $1.05bn.

The Swiss insurer has snapped up Rural Community Insurance Services and its subsidiary Rural Insurance Co subsidiary from Wells Fargo.

The insurer protects US farmers against weather-related losses on crops. Zurich follows acquisitions by HCC and Hank Greenberg’s STARR companies, which have also bought agricultural insurers in the US, believing that there will be a growth in demand for food.

The deal fits in line with Zurich’s strategy of using its $3bn spare cash to either spend on acquisitions or return capital to shareholders.

Zurich had planned to buy RSA for £5.6bn in September, but dropped the deal after discovering reserving issues in its US motor book and losses from the Chinese port explosion.

Chief executive Martin Senn quit the business following the debacle and Generali chief executive Mario Greco has been tipped as a frontrunner to take over the business currently being run by chairman Tom de Swaan.

Zurich has showed no signs of erring from its plans to cut 1,800 jobs from its 55,000 workforce. The cull includes 440 jobs from the UK.