Intact Insurance shows increasing interest in U.S. expansion

Published: February 10, 2019

Updated: February 28, 2019

Author: Luke Jones

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Canada’s largest property and casualty insurance provider says it still holds an interest in a commercial merger or acquisition in the United States. Intact Insurance CEO Charles Brindamour says the company is learning more about distribution opportunities south of the border and is open to “deploy capital”.

Brindamour was speaking during Intact’s conference call to analysts this week.

“We are not at the level of big capital deployments in the U.S. – hence our priority for capital deployment is in Canada – but we are certainly starting to explore smaller and mid-tier capital deployment opportunities in the U.S. and that very much includes distribution,” Brindamour added during the call, which detailed the company’s 2018 financial results.

Intact has been a frequent M&A player in Canada since being formed from ING Canada in 2009. In 2011 the company acquired AXA’s Canadian operations, while in 2011 Jevco was brought under Intact’s wing.

In May 2017, the company continued its spending by making a foray into the U.S. market. Intact acquired Minnesota-based OneBeacon. In Canada, Intact remains the country’s largest personal insurance provider with roughly 17% of the market, but has only a small base in the United States.

“When you look at our footprint in the U.S., we have 14 different business lines spread across the land,” Brindamour said. Those lines come from OneBecon and include ocean and excess property; inland marine; management liability; excess property; group accident and health; surety; entertainment; environmental; financial institutions; financial services; healthcare; public entities; technology; and tuition refund.

“The opportunities to expand our footprint, fortify our position and build scale in those 14 lines of business could very well, in my mind, go through distribution acquisitions, which is different from our distribution strategy in Canada. [The Canadian distribution strategy] consists of building a massive largely personal lines distribution operation,” Brindamour said.

“In distribution in the U.S., if you slice it, it is a different ecosystem in specialty lines than it is in the context of Canada. You have what they call independent agents, you have [managing general agents] who are specialized in certain segments, you have [managing general underwriters] who are involved to an even greater degree. Some of these players retain a greater portion of the underwriting risk.”