Agribusiness giant Cargill is selling its crop-insurance agency to Silveus Insurance Group, based in Warsaw, Ind. In a joint announcement, the companies said the transaction is expected to become final in mid-January. Terms of the sale were not announced. Cargill Crop Insurance LLC entered the industry in 2007.
Dave Baudler, president of Cargill AgHorizons U.S., said the unit, which includes grain elevators and farm service centers, could carry out its mission of grain marketing and helping farmers manage risk without direct involvement in crop insurance. Tyler Silveus, the chief executive of Silveus Insurance, said the acquisition was the first significant purchase the company has made in the crop-insurance area. The announcement described Silveus as one of the largest U.S. crop-insurance agencies.
The sale would be the latest in a spate of turnover among insurers. Wells Fargo sold its crop-insurance business to Zurich Insurance Group in late December. Also in 2015, HCC Insurance Holdings bought Producers Ag Insurance from CUNA Mutual Group, and Deere and Co. sold its crop-insurance business to Farmers Mutual Hail Insurance Co., of West Des Moines, Iowa.
With the sale, Cargill is realigning its portfolio of businesses, said the Wall Street Journal. “Over the past year, Cargill sold its U.S. pork operations, spun off a hedge-fund unit and acquired a Norwegian fish-feed producer … ” The Journal quoted an agricultural economist as saying that, with the decline in commodity prices since 2012, earnings from insurance premiums also declined because the most popular policies are tied to crop prices.