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ARAG-DAS deal unites Canada’s titans in legal expense insurance


March 16, 2021   by Adam Malik


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Legal expense insurance company ARAG Group has announced that it will be acquiring competitor DAS Legal Protection in Canada.

The deal was announced Tuesday in a move that will see the German-based company acquire the Canadian MGA. Terms of the deal were not disclosed.

DAS managed premiums of about $29.3 million in 2019, according to the announcement. DAS’s product portfolio is made up of legal expenses insurance products for Canadian families, landlords, condos/stratas, and small businesses.

ARAG has been in Canada since 2016, when it launched its subsidiary ARAG Services Corporation, a Toronto, Ont.-based MGA. ARAG Services Corporation offers legal expense insurance products and services for brokers, underwriting agents, and insurers in Canada, underwritten by HDI Global Specialty SE.

The DAS deal is part of ARAG’s internationalization strategy, said Barbara Haynes, CEO of ARAG Service Corporation’s Canadian operations. ARAG has expanded into Australia and bought DAS’s operations in Ireland a few years ago. The company has operations in 19 countries.

“Of course, we were in Canada already, but with a small organization,” Haynes told Canadian Underwriter. “So this really strengthens the Canadian operation for us by purchasing DAS. DAS here has a very strong team and some really good relationships, so it’s a perfect fit for us.”

About 70% of ARAG’s business is in legal expense insurance, she added.

iStock.com/Eva Almqvist

With DAS and ARAG being two of the nation’s top legal expense insurance companies, there’s a level of familiarity between them, Haynes explained. For example, DAS has a family and entrepreneurial spirit, which meshes well with ARAG, a family-owned business.

Furthermore, Haynes was the CEO of DAS until she retired and went on to do some consulting work in the industry. She was lured back to her current role with ARAG last March after her predecessor retired.

“DAS has done very well in the 10-11 years that it’s been in business here in Canada,” Haynes said. “It’s got a spread of good partnerships with brokers and other insurers. It’s got some good products and a really great team.”

Haynes emphasized the deal is good for clients because ARAG has been making investments in the legal expense insurance space to be successful long-term.

“We do a lot of digital work; working with bots to support legal advice,” Haynes said in an interview. “At some point, we’d like to bring some of those digital services to Canada. ARAG’s has been pretty focused on legal services, expanding legal services as well as insurance. We have a document library, where customers can go online and find do-it-yourself legal documents and templates. That’s an additional service we provide.

“DAS has got some things that ARAG doesn’t have, and vice versa. I think if you put the two things together, we’ll certainly be a lot stronger.”

All staff will be retained, ARAG noted in its announcement. For Haynes, it’s important that employees from DAS are comfortable with the new ownership group. “It’s a pretty highly skilled group of people, so we’re anxious for them all to stay on board.”

In fact, there are vacancies in both companies, so the new team will be expanding, she added.

For Haynes, it’s important that customer service remains top-notch.

“This is not about cost-cutting or anything like that,” she said. “It’s about investing in the business, providing good service to all of our business partners — whether they be brokers, insurers, or law firms — and expanding the breadth of what we can offer them in the legal services and legal insurance world,” Haynes said.

 

Feature image by iStock.com/DNY59


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