May 6, 2021 by David Gambrill
Intact Financial Corporation and Dutch insurer Tryg A/S have received all anti-trust and regulatory approvals for the acquisition of RSA Insurance Group plc, setting the stage for closing the mega-merger within a month.
The last items remaining on the to-do list include RSA re-registering as a private limited company, and the High Court of Justice in England and Wales formally approving the £7.2-billion merger at a court hearing scheduled for May 25, 2021. With the court’s blessing, the deal would close on June 1, 2021.
Under the agreement, Intact would acquire RSA’s operations in Canada, Britain, Ireland and the Middle East. Tryg would acquire RSA’s operations in Sweden and Norway. RSA’s operations in Denmark would be split 50/50 between Intact and Tryg.
Intact is the largest provider of property and casualty (P&C) insurance in Canada with over $12 billion in total annual premiums and a market share of 15.27% (based on net premiums written of $8.8 billion in 2019), according to Canadian Underwriter’s 2020 Stats Guide. The company has more than 16,000 employees serving 5 million clients through offices in Canada and the United States.
RSA ranks seventh overall in Canadian P&C market share, with about 4.4% (based on almost CAN$2.5 billion net premiums written in 2019), also per according to Canadian Underwriter’s 2020 Stats Guide.
With the acquisition of RSA’s Canadian, U.K., and international operations, Intact expects to increase its annual premiums from $12 billion to $20 billion, the company has stated earlier. The deal is anticipated to increase both Intact’s premiums in Canada and its total premiums in specialty lines by about 30%.
In a management discussion and analysis released in February, Intact said it expects more than $250 million of pre-tax annual run-rate synergies within 36 months of the RSA deal closing.
Brokers commenting on the deal to Canadian Underwriter in past interviews have generally expressed the view that the merger deal still leaves a lot of space for more consolidation within Canada’s fragmented P&C market.
However, some brokers have suggested the deal could have an uneven effect on certain pockets of Canada, such as in Atlantic Canada, for example, where Intact and RSA Canada both hold significant market share. For example, in Newfoundland and Labrador, Intact and RSA Canada hold a combined market share of more than 54% in personal property lines, according to Canadian Underwriter’s 2020 Stats Guide.
Feature image courtesy of iStock.ca/guvendemir