In a potential tie that some Wall Street analysts, according to the WSJ, are calling a “good deal” for MetLife shareholders, Zurich Insurance Group has confirmed that it is in advanced negotiations through its Farmers Group to acquire the MetLife home and auto insurance unit. A Reuters report suggests the deal could reach around US $ 4 billion (around AU $ 5.48 billion).
As MetLife expanded its benefits programs, having recently agreed to buy vision insurer Versant Health for US $ 1.7 billion, its P&C division faced stiff competition from competitors like GEICO, Progressive and State Farm.
The deal comes after a poor third quarter for MetLife’s P&C division – adjusted profit for its U.S. property and casualty business fell 68% to just $ 18 million on $ 3.7 billion in premiums, including 66% came from car coverage, the remaining third being home insurance. The poor results follow the company’s largest natural disasters in a decade, which topped improving auto claims during the COVID pandemic.
Although the insurer’s share price has nearly doubled from its low of US $ 23 in March, it is still languishing below the US $ 52 it hit in late February.
Farmers Insurance Group ranked 9th in the United States for damage premiums last year, accounting for just under 3% of the market.
How they stack up
Top 10 P&C insurers according to written premiums
Sources close to the negotiations said the plan is to announce the terms of the deal next month, provided no unforeseen issues arise.