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The advantage of merging insurers by telework


November 27, 2020   by Greg Meckbach


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When COVID-19 was officially declared a pandemic nearly nine months ago, Jean-François Chalifoux was helping to lead the merger that formed Canada’s largest mutual insurer.

“I was in Montreal March 12 [2020] and at 11:00 a.m. sharp, the [National Hockey League] announced that the [Montreal Canadiens] game was cancelled and I was actually hosting partners in [an arena corporate luxury] box,” said Chalifoux, then CEO of Sainte Foy-based SSQ Insurance. “I told my team they need to get ready for a lockdown.”

Chalifoux, now CEO of La Capitale/SSQ, described in a recent virtual conference what it was like for SSQ and Quebec City-based La Capitale to go through a merger during a pandemic.

The companies closed their merger July 1, 2020. The deal was originally announced in January 2020.

It remains to be seen whether the social distancing precautions made it easier or more difficult to do a merger, Chalifoux suggested Nov. 24 during a panel at KPMG Canada’s 29th annual Insurance Conference.


“I would have preferred to do this all face-to-face, but looking backward, I think there were benefits in a telework environment in the context of an M&A,” Chalifoux said during the panel entitled Merger of equals: A Canadian insurance M&A story. “There were not as many opportunities to gossip around the water coolers. People were extremely focused on the task at hand.”

Had it not been for the pandemic, Chalifoux observed, La Capitale and SSQ probably would have had in-person meetings, in which people from one firm are on one side of the table and people from the other firm on the other side of a table.

“It creates opportunities for confrontation, which I don’t see on Zoom or Teams or WebEx,” he said. “So people are extremely focused on their mandate. I have never felt so connected with my frontline workers and my leaders with frequent webcasts to share direction on the intent behind the merger.”

With their merger, SSQ and La Capitale have formed Canada’s largest mutual if you count both life and health and property and casualty premiums. Wawanesa remains Canada’s largest P&C mutual.

In the Canadian P&C market, La Capitale ranks 13th.

For the time being, the merged firm is calling itself La Capitale/SSQ. But the carrier is expected to announce a new name shortly. Before the merger, both firms had annual premiums, including life and health, of about $2 billion each.

Both SSQ and La Capitale retained KPMG Canada as their advisor for the merger.

KPMG Canada deal advisory partner Georges Pigeon and KPMG Quebec insurance sector lead Walter Rodina spoke Nov. 24 on the panel, along with Mélissa Gilbert, the combined company’s executive vice president and lead, finance.

Gilbert and Chalifoux were asked what it was like to go through a merger during COVID-19, which was officially declared a pandemic March 11, 2020, by the World Health Organization.

“Everything was running smoothly [with the merger] and we were quite happy and quite optimistic, ahead of schedule, and then – bang, a big surprise. The pandemic hit,” Chalifoux said.

“Jean St-Gelais, [then] CEO of La Capitale, and myself – we chatted within the first few days and we quickly determined that we wanted to continue on with the merger,” added Chalifoux.

“It could have been a different story in other organizations. We were so convinced that it was the right thing to do. We said ‘Let’s deal with the [health and safety priorities] first, but we should maintain the target to close [the merger] prior to July 1.”

St.-Gelais, who was not on the KPMG panel Nov. 24, is now chairman of the merged firm.

In the Quebec property and casualty market, La Capitale and SSQ had direct written premiums of $1 billion and $298 million in direct written premiums respectively in 2019, according to Canadian Underwriter’s 2020 Statistical Guide. This means they ranked third (behind Intact and Desjardins) and 10th in the Quebec P&C market. Canada-wide, La Capitale and SSQ ranked 13th and 36th respectively in the P&C market in 2019.

The merger with SSQ came about a year after La Capitale merged with LEDOR, a mutual insurer based in Sainte-Claire, Que.

La Capitale General owns Mississauga, Ont.-based Unica Insurance and L’Unique General Insurance.

In 2008, La Capitale General bought York Fire & Casualty Insurance Company from Kingsway Financial Services Inc., which used to be based in Toronto but is now based near Chicago and is no longer in the P&C business. Kingsway now provides warranties for vehicles, fridges, and air conditioners.



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