John Deere to offload crop insurance business

Deere & Company has said it is likely that a strategic review of its US crop insurance business, which has some 50,000 customers in more than 40 states, would result in the sale of the business. The unit underwrites policies through John Deere Insurance Company.

Deere said no formal decisions have been made and no agreements have been reached concerning the company’s crop insurance operations. Citi has been retained as exclusive financial advisor to assist in the initiative.

Deere has been involved in the crop insurance business for eight years, during which John Deere Insurance Company has become a top-10 provider of crop insurance with national distribution and a product portfolio of both government-backed multi-peril crop insurance (MPCI) products as well as private crop insurance products such as hail protection.

“The process of announcing that the company is seeking strategic options for a business unit most often results in the sale of the business unit. This process helps determine the interest from other companies in purchasing the business but could include other options,” the company said.

It added: “Effective risk management remains an important factor in successful farm operations. As a normal course of business, Deere & Company continually evaluates the relative strengths and strategic fit of all its businesses in light of industry and market conditions.   While crop insurance provides a unique and important touch point with our agricultural customers, we have determined that the federal crop insurance program itself is not core to John Deere.”