ING strengthens B.C. position

ING Canada, through its Calgary-based subsidiary Western Union Insurance, has entered into a strategic alliance with B.C.-based BCAA. Under the agreement, ING will purchase BCAA’s subsidiary, BCAA Insurance Corporation, for undisclosed terms. BCAA will continue to sell home and auto insurance products through its 23-centre provincial-wide network with Western Union serving as the underwriter.

The transaction adds $34.9 million in direct written premiums (DWP) to Western Union’s coffers. Currently, Western Union writes $76.8 million in DWP in B.C. and $217.9 million DWP nation-wide. The transaction catapults ING to number one in B.C. ranking with $117.7 million in annual direct written premiums, passing General Accident. In total, ING holds 8% of the B.C. market.

The alliance also adds a new dimension to Western Union’s distribution network. BCAA marks ING/Western Union’s first solid entry into B.C.’s direct writing field through BCAA’s captive sales force. With support mounting to deregulate B.C.’s auto insurance – and BCAA formerly a top player in this field – Western is positioning itself well to offer full automobile insurance products.

Don Smith, president of TRAC Insurance Services Ltd., notes the transaction is in line with ING’s aggressive acquisition strategy to create new distribution channels. “The alliance provides ING with another vehicle to sell their financial services products. With BCAA, ING has a captive sales force with which to experiment alternative distribution,” he says.

This is not ING’s first foray into alternative distribution channels. ING recently cemented its relationship with broker consolidator Equisure Financial Network, injecting a $99 million investment into the company and jointly-opening a new underwriting company.