Boston, MA 01/24/2014 (wallstreetpr) – Wells Fargo & Co (NYSE:WFC), the largest U.S. home lender, has announced plans to reduce its insurance brokerage locations by more than 40 percent. In this move, the company is aiming to concentrate on locations with high-growth and bigger clients. Broadly, this is part of the bank’s ongoing consolidation efforts, something that currently cuts across major banks in the U.S.
Wells will be selling the identified locations to USI Insurance Services which will purchase 42 brokerages and consulting offices. Following the sale of the 42 locations, the bank will be left with 55 locations in larger markets. These remaining locations, according to the bank’s head of insurance Laura Schupbach, accounts for more than 90 percent of Wells Fargo’s brokerage revenue.
As Wells Fargo & Co (NYSE:WFC) seeks to consolidate and stem losses as can be seen in the sale of some insurance locations, it is also seeking to diversify revenue and to strength customer ties. And there is no better way to do this than concentrating operations in major markets where it can serve top-end clients.
Some of the insurance brokerages earmarked for sale are in locations such as West Virginia, Alaska, Idaho, Ohio, Anchorage and Dayton. Instead, Wells Fargo will retain locations in North Carolina, Minneapolis, Dallas, Charlotte and San Francisco.
This sale deal is expected to close in the second quarter and it will affect an estimated 750 staff in Wells Fargo & Co (NYSE:WFC)’s Insurance division. Currently the division boasts 6,500 employees, many of who will be reorganized to be in-line with the new structure.
Insurance brokerage reorganization
Wells Fargo & Co (NYSE:WFC) announced that its brokerage operations will be headed by Kevin Kenny. The bank will operate three units in the U.S headed by regional managing directors who will report to Mr. Kenny.
The bank is not expected to make new hiring given that it is currently cutting down on the number of its staff to curb expenses. It is important noting that Wells Fargo & Co (NYSE:WFC) emerged as the most profitable bank in the U.S. among the four leading lenders that include JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp (NYSE:BAC) and Citigroup (NYSE:C).