Disrupters likely in Canadian insurance industry as consolidation continues
Published: June 26, 2018
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
It is widely expected that global insurance companies will seek consolidation through mergers and acquisitions (M&As), and Canada is no different. Indeed, executives at a recent conference believe more insurance companies will pursue consolidation and the amount of companies in the market will decrease.
Adam Mitchell, principal of Ontario’s Mitchell & Whale Insurance Brokers Ltd. Believes the current insurance industry is like a “giant poker tournament with thousands of tables.” Mitchell says the insurance marker won’t be as fragmented as it currently is. He was speaking at the Property and Casualty Underwriters Club (PCUC) luncheon held June 13 in Toronto.
Referencing the poker analogy again, Mitchell cautioned there will be only “a few tables left”. Intact Insurance is the largest P&C provider in Canada and was represented at the luncheon by Lou Gagnon, president of Canadian operations. He says disruption in the insurance industry is likely, pointing to how Uber caused problems for the traditional taxi industry.
“It’s known that distribution in financial services is definitely a place where there is good profit being made,” Gagnon said. “So if you make profit, there is a chance that you are going to be disrupted.”
Recent acquisitions in the Canadian market include:
- Aviva Canada’s 2016 acquisition of RBC Insurance, the Royal Bank of Canada’s home and auto insurance carrier
- Desjardins Group’s 2014 acquisition of State Farm’s Canadian operations
- Travelers Companies Inc.’s 2013 acquisition of The Dominion of Canada General Insurance
- Intact Financial Corp., formerly known as ING Insurance, acquired both AXA’s Canadian operations and Jevco Insurance in 2012
- Toronto-based Fairfax Financial Holdings Ltd. acquired Allied World last year