November 18, 2020 by Greg Meckbach
If Intact Financial Corp. takes over RSA Canada, the combined firm will go to market with the “strongest” brands, meaning it remains to be seen what happens in Canada to brands such as RSA, Unifund, and Johnson, Intact’s CEO suggested in a press conference Wednesday.
Intact CEO Charles Brindamour also suggested that, if there is a meeting of the minds, the company would “be keen” to have RSA Canada CEO Martin Thompson join the Intact team.
Intact announced Wednesday that a deal to acquire RSA’s operations in Canada (as well as some overseas) has been approved by the boards of Intact, RSA and Denmark-based Tryg A/S. The deal was first made public Nov. 5.
During a press conference Wednesday, Brindamour was asked by Canadian Underwriter whether Intact will continue going to market in Canada using RSA’s brands including Johnson, Unifund, and Canadian Northern Shield.
“We have not made a final determination,” replied Brindamour.
During the press conference, Brindamour said: “If you look at the Canadian market, the top two brands would be Intact Insurance and belairdirect, which happen to be the two brands on which we have built our business. So clearly this transaction is one of growth and we will make sure that, over time, as we integrate the business, we build on the strongest brand.”
Intact would also acquire RSA’s operations in Britain, Ireland and the Middle East. Tryg would acquire RSA’s business in Sweden and Norway. Intact and Tryg would co-own what is currently RSA’s business in Denmark.
“The brand of RSA in the [United Kingdom] market is very strong and we will continue to invest and build in those brands,” Brindamour said.
Decisions on what happens to the Canadian brands will start to be made over the coming weeks, he suggested.
“The integration planning will start in the coming weeks, and brands will definitely be [part of the conversation],” Brindamour said. “But it is clear that we will build on the stronger brands here in Canada, which would be Intact and belairdirect and make sure that we are very thoughtful in the choices that we make. And those will be made during the transition planning phase.”
Also yet to be decided is what role Thompson, who became RSA Canada CEO in 2016, would have.
In reply to a question from Canadian Underwriter, Brindamour said Wednesday Intact has not yet announced Thompson’s role.
“Martin is a talented guy, so I am looking forward to having an opportunity to sit down with him and see how he sees the future,” said Brindamour. “If we can have mutual interests converge, we will be keen to have Martin join the Intact team, but obviously we need to advance the integration process and plan for the closing of the transaction.”
Thompson, formerly RSA Canada’s senior vice president of commercial insurance and global specialty lines, was promoted as CEO of RSA Canada when Rowan Saunders left RSA Canada to become CEO of Economical Insurance. Thompson has been with RSA Group since 1997.
Intact and Tryg announced Nov. 5 they intend to form a consortium to jointly acquire London-based RSA. At that time, the deal was still subject to due diligence and approval by RSA’s board.
As of Nov. 18, the deal still requires regulatory approval as well as approval from RSA shareholders. If completed, it is expected to close in Q2 2021 and would cost Intact about Cdn$5.1 billion in cash, most of which Intact would raise by issuing new stock to three major Canadian pension funds. The total deal is valued at about Cdn$12.3 billion, including what Tryg has to pay.