Zenith to Sell CalFarm Subsidiary to Nationwide
Zenith National Corp. has agreed to sell its CalFarm Insurance Co. subsidiary to Nationwide Mutual Insurance Co. for $272 million.
Zenith National, based in Woodland Hills, expects a profit of $100 million, or $5.84 a share, on the all-cash sale by the end of June, the company said.
CalFarm, of Sacramento, is the largest insurer of farmers in the state. Zenith wants to sell it to focus on the workers’ compensation insurance business, Chairman Stanley Zax said.
Workers’ compensation insurers suffered dwindling profits in recent years, as competition for business weighed on premiums and as medical costs climbed.
Nationwide, of Columbus, Ohio, is the fourth-largest insurer of U. S. homes and automobiles. It is a mutual company owned by policyholders rather than investors.
Nationwide President Richard Crabtree called the CalFarm purchase “another solid step” in its expansion in Western states.
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