Wells Fargo may divest its crop insurance business in an auction that could fetch more than $1 billion.

Bank regulatory restrictions have forced Wells Fargo and other banks to reconsider underwriting insurance policies, Reuters reported Tuesday. Wells Fargo is examining strategic options for its Rural Community Insurance Services subsidiary, including a possible sale, "excluding the Wells Fargo Insurance Crop Agency, its brokerage arm," Reuters said.

"Wells Fargo regularly evaluates the strengths and strategic fit for each of its businesses. As our model continues to evolve, we are more focused on increasing cross-sell and growing the distribution side of the insurance business," a Wells Fargo spokeswoman said in a statement.

RCIS makes more than $2 billion in premiums annually from farmers and has more than 4,000 licensed agents who can insure crops.

PartnerRe in Bermuda and Axis Capital Holdings, both looking for exposure in the primary insurance market, could be potential bidders, sources told Reuters.

Wells Fargo now plans to be active in crop insurance through its insurance brokerage arm.

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