Zurich Insurance and Farmers Exchanges have agreed to buy MetLife's U.S. property and casualty business for $3.94 billion.
The Swiss insurer will contribute $2.43 billion to the deal through its Farmers Group (FGI) unit, while the Farmers Exchanges will contribute $1.51 billion, Zurich said on Friday.
The deal will give Farmers Exchanges, to which FGI provides certain administrative and management services, nationwide presence in the United States and access to new distribution channels, Zurich said.
It will also help Zurich deliver its growth targets for 2022.
"The acquisition significantly increases the potential for growth at the Farmers Exchanges and will further boost the share of Zurich's profits linked to stable fee-based earnings," Zurich Chief Executive Officer Mario Greco said.
Reuters was the first to report on Nov. 20 that Zurich was in talks to buy the business.
Motor and home insurers have had a windfall this year as there have been fewer claims due to government lockdowns to tackle the Covid-19 pandemic.
The deal is the latest in the sector, with Denmark's Tryg and Canada's Intact Financial buying British home and motor insurer RSA, and Finland's Sampo and South Africa's Rand Merchant Investment buying Britain's Hastings.
Shares in Zurich were indicated to open 0.75% higher in an overall lower market, according to bank Julius Baer.
The MetLife business to be acquired includes 2.4 million policies, $3.6 billion of net written premiums in 2019 and 3,500 employees, Zurich said.
Zurich said it wanted to fund FGI's portion of the deal through a roughly equal combination of internal resources and hybrid debt.
Zurich's capital position is expected to remain strong following the transaction, with the pro-forma Swiss Solvency Test ratio at around 190%, it said.
Completion of the transaction is subject to regulatory approvals and is anticipated to occur in the second quarter of 2021.