Wells Fargo & Co. said Tuesday it agreed to sell its commercial insurance business to private insurer USI Insurance Services, as the third largest U.S. bank plans to focus on core banking products and services.
The bank has more than 3,000 commercial insurance employees nationwide, and approximately 90 in Minneapolis. A Wells Fargo spokesperson said they expect all of those employees to join USI.
The financial terms of the deal, expected to close in the fourth quarter, were not disclosed by the companies.
The deal comes at a time when the bank is recovering from a sales scandal last year that damaged its reputation. Wells Fargo has doubled its cost-cutting target after expenses soared in the aftermath of the scandal.
The sales abuses in the bank’s branch banking operation led to a $190 million regulatory settlement, launches of other government probes, the firing of several bankers and the departure of CEO John Stumpf. Wells Fargo plans to reduce expenses by another $2 billion through the end of 2019, on top of a $2 billion cost-cutting target previously announced.
The bank said on Tuesday its personal insurance business will report into consumer lending to serve retail customers.
Staff writer Patrick Thomas contributed to this report.