Zurich Insurance Group agreed to buy a Wells Fargo crop-insurance business for as much as $1.05 billion as the Swiss company puts to work excess cash left over from a separate takeover bid that it abandoned this year.

The purchase or Rural Community Insurance Services, or RCIS, will give Zurich a 20% share of a highly regulated market guarding farmers against weather-related losses, Vontobel analyst Stefan Schuermann wrote in a note after the deal was announced Friday. It will provide about $1.6 billion in net earned premiums by 2017, adding 3.5% to Zurich's top line, he wrote.

Zurich, which already provided reinsurance to RCIS, will pay Wells Fargo $675 million plus the amount of excess capital in the unit when the deal closes, estimated at as much as $375 million, according to statements from the companies. The insurers' annual operating results are "not material" to the bank and the transaction is expected to be completed by the end of the first quarter, San Francisco-based Wells Fargo said.

Wells Fargo, the largest U.S. bank by market value, has focused on boosting commercial-lending and wealth-management units, while paring some insurance operations. The lender has been adding wealth advisers from Credit Suisse Group and agreed this year to acquire most of General Electric's railcar- and locomotive-leasing unit. Insurer AmTrust Financial Services reached a deal in May to buy a Wells Fargo business that provides vehicle service contracts.

"The sale of our long-standing crop insurance business allows us to focus on and strengthen our distribution businesses, which account for approximately two-thirds of our insurance revenue," Laura Schupbach, head of Wells Fargo Insurance, said in the statement.

Zurich advanced 0.6% at 2:30 p.m. Swiss time. Wells Fargo slipped 22 cents to $55.25 in early trading in New York.

Wells Fargo, the largest U.S. bank by market value, said in August that it was looking into "strategic options" for the insurance unit. The business's net loss widened to $7.98 million in the first six months of this year from $3.24 million for the same period in 2014, according to a regulatory filing.

Evan Greenberg's Ace Ltd. and RCIS have been the largest U.S. crop insurers in recent years. Starr, led by Evan's his father Hank Greenberg, won approval in 2013 to participate in the government's crop insurance program from the U.S. Department of Agriculture.

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