May 1, 2015 by Canadian Underwriter
Intact Financial Corporation (IFC) announced on Friday that it has completed its acquisition of Canadian Direct Insurance Inc. (CDI), extending its direct-to-consumer operations from coast to coast.
Canadian Underwriter reported in February that IFC had entered into a definitive agreement with Canadian Western Bank to acquire CDI for $197 million.
In Alberta, CDI will be integrated with belairdirect, IFC’s existing direct-to-consumer brand. In British Columbia, the CDI brand will be maintained and will continue to offer its products directly to customers, IFC said in a statement.
“The completion of this transaction represents a great opportunity to grow our direct operations while improving our ability to respond to the evolving needs of our customers,” said Louis Gagnon, IFC’s president service & distribution, in a statement. “The benefits of combining this experienced local team and their track record of strong underwriting performance in Western Canada with the dynamic team at belairdirect will help the organization achieve its goals of growth and innovation,” added Gagnon.
For the past three months, belairdirect has been reviewing CDI’s administrative practices, processes and systems in order to develop an action plan for the orderly and efficient integration of CDI, the statement said. “With this integration planning nearly complete, IFC anticipates a smooth transition and expects to benefit from the transaction as the formal integration begins.”
The acquisition has been financed by IFC exclusively with excess capital. Annual synergies amounting to $10 million after tax are expected from a combination of reinsurance cost reductions, systems-related cost savings and claims efficiencies. IFC expects to maintain its strong capital position on closing with an estimated MCT above 200%.
IFC is Canada’s largest provider of property and casualty insurance in Canada with $7.3 billion in premiums with over 11,000 employees. IFC insures more than five million individuals and businesses through its insurance subsidiaries and is the largest private sector provider of P&C insurance in British Columbia, Alberta, Ontario, Québec and Nova Scotia, the statement noted. Founded in 1996, CDI is a property and casualty insurance company that provides home, auto and travel insurance throughout British Columbia and Alberta. belairdirect has been providing complete car and home insurance solutions to Canadians for 60 years and was the first property and casualty insurer in North America to sell insurance products online, the statement said.