MetLife is selling its home- and auto-insurance business to Farmers Group for $3.94 billion, the insurers said Friday.
The deal is part of a 10-year strategic partnership in which Farmers, which is owned by Switzerland’s Zurich Insurance Group, will get access to MetLife’s network of agents and take over its property and casualty policies.
Farmers will be also able to sell personal insurance products through MetLife’s group benefits platforms. MetLife says that access will allow Farmers to reach 3,800 employers and about 37 million eligible employees.
Shares in MetLife, based in New York City, slipped 1.4% late Friday morning.
Analysts expect more consolidation in the insurance sector, which has seen significant losses due to the coronavirus outbreak.
Last month, RSA Insurance, one of the U.K.’s oldest insurance companies, agreed to a takeover by Canada’s Intact Financial Corp. and Denmark’s Tryg in a cash deal that valued it at about $9.4 billion.
Even before the virus outbreak, companies were seeking acquisitions to cut costs. Late last year, New York Life acquired the group life and disability coverage business of the insurer Cigna for more than $6 billion.
MetLife and Farmers are hoping to close the deal in the second quarter of 2021. MetLife expects to be divested of its property and casualty business in the first quarter 2021.
Farmers was founded in 1928 in Los Angeles and acquired by Zurich in 1998.