BB&T Corporation (NYSE:BBT) announced recently that it has signed an agreement to acquire a unit from the Regions Financial Corp (NYSE:RF) as part of the strategy to venture into the insurance industry. The Regions Insurance is one of the leading insurance broker company with over 60,000 customer base across various markets in the US including the Southeast, Indiana, and Texas. The deal is expected to close in the third-quarter of 2018 subject to the regulatory approvals and other related terms and conditions.
The contract will largely support BB&T’s wholesale and retail insurance networks. The company expects to generate additional revenue of about 2 billion annually from the insurance brokerage offerings. In addition, the deal will provide an opportunity for the firm to further expand its presence in the marketplace. BB&T will also rise in the ranks as the leading insurance broker in the region and globally.
BB&T is the fifth largest insurance broker in the US and operates over 200 branches across the region. The company previously spent more than $500 million to acquire Swett & Crawford in 2016 and another insurance unit in Crump Group Inc., in 2012. The Regions have accepted the transaction as part of the firm’s strategy to simplify and streamline its internal operations to bring down the overall operating cost.
BB&T will integrate its acquired entity into its own operations to enhance its growth and development programs. The president and CEO of the Regions Insurance together with other key associates will be joining the BB&T team to offer various expertise needed for the success of the new company. Additionally, Plans are underway for BB&T to further expand its operations in Pennsylvania, Texas and beyond.
According to BB&T, the joint venture will enable the company to increase its presence in Louisiana and Indiana as well as boost the insurance brokerage offerings in other states including the Alabama, Florida, Georgia, Mississippi, Arkansas, and much more. The plan comes at the time when the Regions Financial Corp is searching for ways to exit the insurance business.
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