Definity Financial Corporation has completed the acquisition of the personal insurance business and the majority of the commercial insurance business, excluding surety, of the Canadian operations of The Travelers Companies Inc.
The transaction expands Definity's scale in the Canadian property and casualty market and adds to its distribution reach across personal and commercial lines.
In December, Definity announced that it has secured all required regulatory approvals, including from the Minister of Finance (Canada), to complete the acquisition of the personal insurance business and most of the commercial insurance business, excluding the surety segment, of The Travelers Companies' Canadian operations.
The transaction is expected to increase Definity’s combined annual premiums to about $6 billion. Commercial lines premiums are expected to grow by approximately $600 million, or 40%, while personal lines premiums will increase by about $1 billion, or 30%, moving Definity into the top five in the country.
The deal is also expected to be immediately accretive to operating earnings per share, with double-digit accretion within three years. The company anticipates about $100 million in pre-tax expense synergies and an internal rate of return above 20%. Operating return on equity is projected to improve by more than 200 basis points.
The acquired business brings additional policyholders, broker relationships and underwriting capabilities to Definity, strengthening its position in several key segments. The transaction also increases Definity’s presence in the commercial insurance market, while further diversifying its product mix.
“Today marks a new era for Definity as we complete this milestone acquisition,” said Rowan Saunders, president and CEO of Definity. “We extend a warm welcome to our new colleagues and remain deeply committed to delivering a positive experience for our customers and valued broker partners. Together, we will continue building a Canadian champion.”
RBC Capital Markets acted as financial advisor to Definity on the transaction, while Blake, Cassels & Graydon LLP served as legal advisor.
