American Family Insurance has agreed to acquire Ameriprise Auto & Home (AAH), a property-casualty insurance provider, in a deal valued at nearly $1.05bn.

The acquisition of AAH is expected to boost American Family Insurance’s products distribution channels. AAH primarily sells its products through a partnership with wholesale retailer Costco.

Following the completion of the transaction, AAH will operate as a subsidiary within the American Family Insurance group and retain its existing name until a new brand name is identified and approved by regulators.

Under the terms of the deal, AAH’s existing customers will retain their policies without any change in coverage or service.

Also, all AAH employees will be retained and report to the subsidiary.

American Family Insurance chair and CEO Jack Salzwedel said: “This is about serving more customers through channels they prefer, and strengthening our ability to protect them.

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“With this acquisition, we expand our efforts to reach customers who prefer to acquire insurance through relationships they have with other entities.

“By doing this and continuing to grow in our other channels, we build scale, capabilities and financial strength to provide greater value to our customers.”

Subject to receipt of regulatory approval, the transaction is likely to conclude in the second half of 2019.

American Family Insurance, which operates as a multi-line mutual insurance group, serves customers in 19 states through its American Family agents, and nationally through subsidiaries.