The Zurich insurance company is in advanced negotiations to acquire MetLife for 4,000 million dollars (3,370 million euros), according to sources close to the operation.
With the agreement, which would be closed through its Farmers Group subsidiary, the company seeks to expand its business as the industry deals with the impact of the coronavirus pandemic, which has generated several claims for business interruptions and event cancellations.
It would also allow MetLife to exit a market in which it faces other companies such as State Farm, Geico and Progressive Insurance.
The bulk of the American company’s business is based on auto insurance, an area in which fewer claims are taking place due to mobility limitations due to Covid-19. The deal could be announced in early December, according to the same sources. MetLife’s adjusted earnings in the US fell 68% in the third quarter compared to the same period in 2019, to $ 18 million (€ 15 million).
According to the firm itself, this decline was due to the “catastrophic losses” caused by the storms in the North American country. For its part, the Swiss insurance group recorded in the first six months of this year a net profit of 1,181 million dollars (1,000 million euros), which represents a 42% drop compared to the gains achieved in the same period from the previous year. Revenues sank 43% between January and June, to 22,257 million dollars (18,838 million euros), due to the result of the investment area