Definity Financial Corporation has reached an agreement to acquire most of Travelers’ Canadian operations, excluding its Canadian surety business, for approximately $3.3 billion (US$2.4 billion) in cash.
The deal is expected to close in the first quarter of 2026, pending regulatory approvals.
Travelers Canada is a national property and casualty insurer with around $1.6 billion in annual gross written premiums. The business includes commercial, specialty, and personal lines. Definity said the acquisition complements its existing operations and will expand its product range and expertise.
Rowan Saunders, president and CEO of Definity, said the acquisition aligns with the company’s growth strategy and will position it among the top four largest property and casualty insurers in Canada. He noted the deal will diversify portfolios, add expertise, and support shareholder value creation.
The transaction will 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.
Definity expects the acquisition 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 percent. Operating return on equity is projected to improve by more than 200 basis points.
The purchase will be funded through a combination of $281 million from a bought deal private placement of common shares, $70 million from a non-brokered private placement to cornerstone investor Healthcare of Ontario Pension Plan Trust Fund (HOOPP), $1.5 billion in excess capital, and about $1.6 billion in new debt.
Definity will acquire all issued shares of several Canadian insurance companies controlled by Travelers, while Travelers will retain its Canadian surety business and one Canadian branch. Assumption reinsurance agreements are planned to facilitate the transfer of certain business lines, subject to regulatory approval.
RBC Capital Markets is acting as financial advisor to Definity. The transaction remains subject to regulatory review, including approvals from the Canadian Minister of Finance and clearance under the Competition Act.
