Intact Insurance (formerly ING) has capability to fund Cdn$1.1-billion acquisition

ING Insurance Company of Canada is formally changing its name this week to Intact Insurance, but its growth strategy — potentially through acquisition — has not.
“Our strategy is one of growth, absolutely,” Intact Insurance spokesman Gilles Gratton says in a wide-ranging interview to be published in the April 2009 edition of Canadian Underwriter. “Basically, if you look at the financial situation of the organization right now, essentially we have the capability to do a Cdn$1.1 billion acquisition right now. That has been our strategy and the strategy remains unchanged.”
Does growth through acquisition remain a viable option despite an economic downturn that has shrunk the amount of credit available to put together a deal?
“Strong companies, strong players are always going to be in good position [to acquire] in any kind of market,” says Intact Insurance president Louis Gagnon. “I think we’re a strong player.”
Many in the industry have wondered aloud about whether Intact Insurance would more likely be a buyer or a seller in the current market environment. The company responds that it sees itself more as a potential buyer.
“We have a very strong balance sheet right now,” Gagnon says. “We have excess capital, we don’t have any debt on our balance sheet, so we’re more on the buyer’s side for sure.
“There are going to be, we think, some important decisions to make in the future to do some acquisition. And I think we are going to be in a very good position to do that.
“On the other side, I don’t see any serious [potential buyers of Intact] having that much cash, Cdn$3.5 billion probably. I think our operations are excellent operations.”
In terms of a general acquisition strategy, the company says it is more likely to expand within its current lines of business than pursue an acquisition that represents a departure from what the company is doing now.
“We are basically looking at expanding what we do,” Gratton said. “If you look at our portfolio which is basically personal lines, home and auto and commercial lines, those are basically the types of acquisitions that we are looking at.”