The long-established California-based insurance brokerage Alliant is understood to have emerged as front-runner to land a deal that would transform the size of its operations, in buying Wells Fargo’s insurance broking operations.
Alliant is believed now to be vying with USI Insurance Services to buy the Wells Fargo unit, and sources suggest that it is now the clear favourite in a deal which is expected to value Wells Fargo’s business at around US$2bn. The deal would involve Alliant buying the seventh largest insurance broker in the US, and industry analysts suggest that it would mean that Allian would jump from twelfth on that list up to fifth.
Wells Fargo has a wide-ranging insurance broking business, with notable strength in property and casualty, professional risk, life products, employee benefits and private risk. In May it was reported that Wells Fargo had decided to sell the business and it was said that it was holding talks with a number of private equity companies, although the rumour was never officially confirmed.
Wells Fargo is thought to be selling the business as part of a wider programme of disposals expected in the coming years, which aim to enable the company’s management to focus more on the company’s market leading retail banking franchise in the US. Analysts say that the insurance brokerage business has become a priority for sale, because of the high prices that other such businesses have commanded of late.
None of the parties have made any comment.