The Hartford To Sell Off Crop-Insurance Biz
NU Online News Service, Oct. 5, 4:24 p.m. EDT?The Hartford Financial Services Group Inc., citing its "strategic direction" for property-casualty operations, announced that it has agreed to transfer all its multi-peril crop insurance business to a unit of Wells Fargo & Company.[@@]
Under the deal, The Hartford, headquartered in Hartford, Conn., will transfer all renewals for its multi-peril crop insurance to Rural Community Insurance Company (RCIC), a unit of San Francisco-based financial firm Wells Fargo.
Details of the financial arrangements were not disclosed. The deal is still subject to approvals by the U.S. Department of Agriculture.
The transaction calls for Rural Community Insurance Services, the parent unit of RCIC and the country's largest crop-insurance provider, to serve as the managing general agent for the 2005 reinsurance year, issuing and servicing The Hartford policies, while RCIC will reinsure risks on this book.
Starting with the 2006 season, Rural Community Insurance Services will fully write and administer this business on its own, The Hartford said. Additionally, Rural Community Insurance Services will offer crop hail and named peril insurance to Hartford policyholders.
Commenting on the arrangement, Ralph Palmieri, senior vice president at Hartford Specialty Lines, noted, "As part of an internal review of our portfolio of businesses we began last year, we concluded that crop insurance is no longer in line with the strategic direction of The Hartford's Property & Casualty Operations."
Mike Connealy, chief executive of Rural Community Insurance Services, also called the acquisition "a great fit" for his company. "All of our customers will be well served by this new alliance," Mr. Connealy said.
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