Wells Fargo is selling its commercial insurance business to national brokerage USI Insurance Services.

USI said it has agreed to acquire Wells Fargo Insurance Services USA, which includes commercial insurance brokerage and consulting, employee benefits and property/casualty national practices, along with Safehold Special Risk, small business insurance, student insurance, individual health and private risk management insurance business lines.

Neither side disclosed financial terms. The transaction is expected to close in the 2017 fourth quarter.

“This is a transformational transaction for both USI and Wells Fargo Insurance,” said Michael J. Sicard, chairman and CEO, USI Insurance Services. “Together, we create a premier industry leader with an un-matched team of exceptional sales consultants, account executives, technical resources and team members. We share a common culture and values, including a focus on delivering a truly different and better set of solutions with bottom line impact.”

“I’m confident USI is an excellent fit for our clients and our team members, and I’m excited about the opportunities we will have by bringing together our exceptionally strong and experienced teams,” said Tim Prichard, head of Wells Fargo Insurance.

Wells Fargo sees the deal freeing it to focus on its core banking business.

“The sale of the commercial insurance business reinforces Wells Fargo’s focus on core banking products and services that best meet the needs of our customers and support strong financial returns for shareholders,” said Perry Pelos, head of Wells Fargo wholesale banking. “By joining USI, an industry leader, the extremely talented team of WFIS insurance professionals will be able to continue to provide customers with products and services that best meet their insurance and risk management needs.”

Wells Fargo said that its personal lines insurance unit is not [art of the ale and will continue to serve its retail customers. The personal insurance business will report into consumer lending going forward. The personal insurance business provides auto, home, umbrella and renters insurance.

In May, Bloomberg reported that Wells Fargo was weighing the sale of its insurance brokerage business, which Bloomberg sources said could be for as much as $2 billion. Yesterday, Bloomberg reported that Alliant Insurance Services was in the running along with USI to buy the business and Alliant was favored.

History of Deals

This is not the first transaction between Wells Fargo and USI Insurance Services. In 2014, Wells Fargo sold 42 of its smaller regional insurance locations representing about 40 percent of its insurance brokerage locations to USI. The remaining 55 locations are in larger markets that generate more than 90 percent of brokerage revenue, Laura Schupbach, head of Wells Fargo Insurance, said at the time of that transaction.

USI Insurance is owned by private equity firms KKR, a global investment firm, and Caisse de dépôt et placement du Québec (CDPQ), a long-term institutional investor. They acquired USI from Onex Corp. in March in a transaction that valued USI at $4.3 billion.

In April of last year, Wells Fargo sold its crop insurance businesses — Rural Community Insurance Agency (RCIA) and its subsidiary Rural Community Insurance Co. (RCIC) — to Zurich American Insurance Co. for $700 million. The two are among the country’s biggest crop insurance providers, writing or about 20 percent of the estimated $10 billion market.

In 2013, Wells Fargo sold its Lubbock, Texas insurance brokerage office to Dallas-based MHBT Inc.

Wells Fargo Insurance Services writes or places about $9 billion worth of premiums annually, according to its website.

USI, headquartered in Valhalla, New York, has more than $1.0 billion in revenue, employs more than 4,400 professionals and operates out of 140 local offices serving every state.

Mayer Brown LLP is representing Wells Fargo & Co. in the sale. Jones Day and Simpson Thacher & Bartlett LLP are legal advisors to USI.

*This story ran previously in our sister publication Insurance Journal.