Canadian Underwriter

Why and where Intact wants to buy more MGAs

September 12, 2021   by Greg Meckbach

Office workstation top view with businesspeople working around M&A

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Don’t be surprised if Intact Financial Corp. buys managing general agents in the United States who place commercial specialty insurance.

“We think there is a big opportunity at the MGA level. We are still focused on that,” Intact CEO Charles Brindamour said Wednesday during the Scotiabank Financial Summit Conference.

A year ago, Intact acquired Hoboken, N.J.-based International Bond & Marine Brokerage Ltd., whose offerings include marine and freight legal liability as well as bonds for ocean transportation, customs and specialty (including performance and airport security).

Intact Public Entities Inc. – formerly known as Frank Cowan Company – is a Canadian MGA Intact acquired in 2019 from Cambridge, Ont.-based Princeton Holdings. That 2019 deal also included the acquisition by Intact of The Guarantee Company of North America.

During the summit Sept. 8, Scotia Capital equity analyst Phil Hardie asked Brindamour whether investors should expect any near-term merger-and-acquisition activity from Intact.

“We want to continue to deploy capital in distribution in North America both to support the Canadian business and to support the specialty lines business in the U.S.,” replied Brindamour.

Intact expanded in 2017 into U.S. specialty lines by buying OneBeacon Insurance Group Ltd. for US$1.7 billion. OneBeacon is now known as Intact Insurance Group USA LLC. It writes commercial specialty coverage including technology, marine, public entities and entertainment.

In Canada, over the next six to nine months, Intact will be focused more on “making the most of the RSA acquisition,” Brindmour said this past Wednesday. On June 1, Intact closed a three-way deal to form a consortium with Tryg A/S to acquire London, England-based RSA PLC. As a result, Intact owns what used to be RSA’s operations in Canada, as well as in Britain, Ireland and the Middle East. RSA’s operations in Sweden and Norway are now owned by Tryg while Intact and Tryg have agreed to sell Codan DK [the former RSA operation in Denmark) to Alm.Brand A/S Group.

The RSA deal gave Intact “at least 30% more scale in specialty lines and global capabilities,” Brindamour said Sept. 8 during the Scotiabank Financial Summit Conference.

“Now we are in a zone where I feel more comfortable about capital deployment in the U.S.” he added, alluding to efforts over the past three years to make OneBeacon more profitable.

“We will keep an eye on opportunities to bolster our specialty lines division. We want to be one of the best specialty lines operators in the world. We are well on our way. That will call for capital deployment in the next decade.”

Feature image via Productions

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