Definity Financial Corporation reported gross written premiums (GWP) of $1.34 billion in Q2 2025, up 7.9% from the same period last year.
Excluding an exited line of business, GWP rose 9.1%, driven by rate and unit count growth in personal auto, firm pricing in personal property, and continued expansion in commercial lines. The company’s combined ratio stood at 92.9%, reflecting strong underwriting discipline across both personal and commercial segments.
The results come as Definity moves to accelerate its growth strategy with a planned $3.3 billion acquisition of Travelers Canada. The deal, announced in May and expected to close in Q1 2026 pending regulatory approval, is projected to boost the company’s operating return on equity (ROE) by at least 200 basis points post-integration.
Definity reported underwriting income of $74.6 million for the quarter, down from $93.7 million in Q2 2024. The decrease reflected an uptick in catastrophe losses and a higher accident year claims ratio in commercial lines.
However, profitability improvements at Sonnet and continued expense efficiencies helped offset part of the impact. The combined ratio increased 2.8 points year-over-year to 92.9%.
Personal lines GWP rose 6.9% and 8.6% excluding the exited line of business. Commercial lines GWP grew 10.0%, supported by retention, rate achievement, and expanded small business and specialty capabilities. Year to date, the combined ratio reached 93.7% compared to 92.0% in the same period last year, with underwriting income at $129.6 million, down from $148.5 million in 2024.
Net investment income for the quarter was $50.7 million, a slight increase from $49.9 million in Q2 2024. Higher bond holdings drove the gain, partially offset by lower dividend income. Distribution income also increased to $21.9 million, up from $17.2 million, due to contributions from recent acquisitions and underlying organic growth.
Operating net income was $98.9 million, down from $109.1 million in Q2 2024. Diluted operating earnings per share declined to $0.84 from $0.94. Definity’s trailing 12-month operating ROE fell to 9.6% from 10.8%, influenced by higher catastrophe losses and growth in adjusted equity. Net income attributable to common shareholders dropped to $75.1 million from $103.8 million, largely due to acquisition-related expenses and catastrophe losses.
Despite the earnings decline, the company’s capital position remained strong. Book value per share reached $31.39 at quarter-end, up 19.9% year-over-year, aided by private equity placements to fund the Travelers Canada deal.
The acquisition of Travelers Canada marked a significant milestone in Definity’s expansion efforts. Announced in late May, the transaction is expected to provide strategic scale and broaden Definity’s position in the Canadian P&C market.
The company completed private placements of common shares in June, raising $375.2 million in net proceeds to partially fund the acquisition. Clearance under the Competition Act was obtained in July, with final approval from the Minister of Finance pending. In connection with the transaction, Definity reported $41.2 million in acquisition-related expenses and $1.8 million in integration costs during Q2.
Definity’s board also declared a quarterly dividend of $0.1875 per share, payable on September 26, 2025, to shareholders of record as of September 12, 2025.
