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Co-op, mutual sector to play a role in the consolidation of Canada’s p&c industry: Leroux


February 13, 2015   by Angela Stelmakowich, Editor


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Desjardins Group’s acquisition of State Farm Canada “is ensuring the co-op and mutual sector will play a big role in the consolidation of Canada’s property and casualty industry,” Monique Leroux, chair of the board, president and CEO of Desjardins Group, said Thursday during a speech in downtown Toronto.

“The State Farm transaction is a truly innovative example of co-operation,” Leroux told assembled guests at The Canadian Club. Three of the world’s leading co-operatives and mutuals – State Farm in the United States, Desjardins in Canada and its European partner, Crédit Mutuel, are investing in the Desjardins p&c company “to ensure the transaction is a success,” she reported.

Monique Leroux, chair of the board, president and CEO of Desjardins Group

Desjardins has made a number of acquisitions across the country since 2011, perhaps most notably the purchase of State Farm Canada’s p&c and life insurance businesses, and the company’s Canadian mutual fund, loan and living benefits companies. The acquisition, which officially closed Jan. 1, makes Desjardins Group the second largest p&c insurance provider in the country.

The company reports that its annual gross written premiums in 2014 were more than $2 billion and are projected to increase to more than $4 billion in 2015.

Related: Q3 combined ratio drops, net income up for Desjardins General Insurance

“While our 2014 numbers haven’t been released yet, in 2013 we generated more than $1.5 billion in surplus earnings,” Leroux told attendees.

Leroux noted that the Canadian economy is going through a challenging time right now, pointing to the fact that full-time job creation has slowed, oil prices are down significantly, and the Canadian dollar is falling. Still, there are opportunities, including the diversity of Canada’s economy, she emphasized.

The United States is growing robustly, Leroux said. “This is positive for Canada. But it would be a mistake to rely on only one market over the long term,” she pointed out.

“The government has an important role to play in providing the right conditions for success,” Leroux suggested. “Looking at governments in Canada, it also seems to me that we need more collaboration at all levels: between the federal government and provinces, but also with our major cities.”

Businesses must diversify their markets and take the opportunity to invest more in technology, innovation and people to increase productivity, Leroux advised.

Desjardins is looking to do just that. “Looking forward, Desjardins is committed to growing across the country. We want to diversify our markets and client base. We are also committed to investing in technology, innovation and people.”

The acquisition of State Farm Canada’s operations “provides us with an agent network in Ontario, Alberta and New Brunswick for the distribution of other Desjardins financial products,” she said. The company reports more than 1,900 Canadian employees from State Farm, along with about 500 agents, will continue to serve more than 1.2 million customers in Ontario, Alberta and New Brunswick.

Leroux suggested that digital technology is transforming the world. “We know that Silicon Valley companies and others around the world have their sights on the financial services market,” she said, emphasizing the need for co-operation and innovation to be able to meet the challenge.

PHOTO: Monique Leroux, chair of the board, president and CEO of Desjardins Group. Canadian Press file photo, by Ryan Remiorz


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