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Desjardins expects some big players to be part of insurance landscape in future


April 11, 2014   by Angela Stelmakowich, Editor


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The consolidation of the property and casualty market in Canada is a trend that will impact the insurance industry in future and that future will likely include, among others, a small number of very large players, notes Denis Dubois, chief integration officer and general manager for Ontario, Atlantic and Western Regions at Desjardins General Insurance Group.

Denis Dubois, chief integration officer and general manager for Ontario, Atlantic and Western Regions at Desjardins General Insurance Group

“What we see down the road is not a $7-billion insurer. What you’ll see is a $10-bllion insurer – and you’ll see two or three of them,” Dubois predicted during the “Up Close & Personal” session, part of the 2014 CIP Society Symposium in downtown Toronto Thursday.

With the completion of Intact Financial Corporation’s $2.6-billion acquisition of AXA Canada in 2011, Dubois said Desjardins officials had to look at the options.

The emergence of these large companies is not in 10 years, Dubois suggested, but “probably within five years. So, do you want to position yourself as one of those or take another position within the market with the implications of that?”

Scale was certainly a consideration when Desjardins began discussions with State Farm. Desjardins Group announced earlier this year that it had entered into a definitive agreement to acquire State Farm Canada’s P&C and life insurance business, as well as its mutual fund, loan and living benefits companies. Subject to regulatory approval, the transaction is expected to close next January.

The acquisition would make Desjardins the second largest P&C insurance provider in Canada, with annual gross written premiums of about $3.9 billion.

In late 2010, Desjardins announced an all-cash offer to acquire Western Financial Group. Among other things, the move provided a platform in Western Canada for global products distribution to serve existing clients of Western Financial Group and Desjardins across the country.

Dubois does not characterize that transaction as “a P&C move,” but rather the big driver for Desjardins was to establish a footprint outside of Quebec from a financial institution perspective.

The deal provided a distribution channel, 1,500 employees and a customer base, he pointed out. “This is a long-term strategy,” Dubois noted, adding that it was “really a foundational transaction,” with “no short-term high expectations.”


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