Wells Fargo selling 42 brokerage offices to USIPosted On: Jan. 23, 2014 12:00 AM CST
Wells Fargo Insurance Services USA Inc., the fifth-largest U.S. broker, agreed to sell 42 of its smaller insurance brokerage and consulting offices to Valhalla, N.Y.-based USI Insurance Services L.L.C., the companies said Thursday.
Terms of the transaction, expected to close at the end of the second quarter, were not disclosed.
The sale is part of San Francisco-based Wells Fargo Insurance's ongoing strategy to concentrate on growing its middle-market insurance business in select markets, which include Charlotte, N.C.; Dallas; Minneapolis; and San Francisco, Wells Fargo & Co. said in a statement.
In an interview with Business Insurance, Laura Schupbach, executive vice president and head of Wells Fargo Insurance, said Wells Fargo remains committed to its insurance brokerage business, and that the USI deal does not indicate a pending exit from the insurance market. The offices being sold represent about 10% of Wells Fargo's insurance brokerage revenue, Ms. Schupbach said.
"We believe in the business. We're just making some smart decisions to get better at it," Kevin Kenny, executive vice president and head of Wells Fargo's insurance brokerage business, said in an interview.
About 750 Wells Fargo employees working in the 42 offices will be offered positions at USI, a Wells Fargo spokeswoman said.
Wells Fargo Insurance was ranked the fifth-largest broker of U.S. business in Business Insurance's latest ranking, while USI Holdings Corp. holds the No. 10 spot.
Under the agreement, USI will acquire the following locations: (Ala.) Birmingham and Tuscaloosa, Ala.; Anchorage, Alaska; Fresno and Grass Valley, Calif.; West Palm Beach, Fla.; Savannah, Ga.; Boise, Idaho; Springfield, Ill.; Elkhart and Fort Wayne, Ind.; Overland Park, Kan.; Lexington and Louisville, Ky.; Grand Rapids, Mich.; Grand Rapids, St. Cloud and Virginia, Minn.; Omaha, Neb.; Albuquerque, N.M.; Bismarck, Minot and Valley City, N.D.; Dayton and Youngstown, Ohio; Eugene and Newport, Ore.; Erie, Pa.; Columbia, S.C.; Knoxville, Tenn.; El Paso, Texas; Salt Lake City, Utah; Abingdon, Bluefield, Grundy and Norfolk, Va.; Beckley, Charleston, Huntington, Martinsburg, Morgantown and Wheeling, W. Va.
Michael J. Sicard, USI's chairman, president and CEO, said in a USI statement: “We look forward to building and expanding in these cities and states with … middle market property-casualty, employee benefits, personal lines, retirement programs, and other specialty lines.”