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This merger would form Canada’s largest mutual insurer


January 29, 2020   by Greg Meckbach


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Quebec’s third-largest property and casualty insurer is proposing to merge with the province’s Number 10 player. La Capitale Insurance and Financial Services and SSQ Insurance announced Wednesday they plan to combine operations.

La Capitale is based in Quebec City and SSQ is based in Sainte Foy, just outside the provincial capital. La Capitale and SSQ have 9% and 2.6% market share in Quebec P&C insurance respectively, according to Canadian Underwriter’s 2019 Statistical Guide. Intact and Desjardins have 24.2% and 15.7% respectively.

A merger of La Capitale and SSQ has been approved by boards of directors for both insurers. It still requires approval of both insurers’ mutual policy holders as well as regulators.

Mutual policyholder meetings are scheduled Mar. 3, a spokesperson for La Capitale told Canadian Underwriter Wednesday.

The majority (78.38%) of La Capitale General is – in essence – ultimately owned by La Capitale Civil Service Mutual, which has more than 312,000 mutual members, the firm said in its 2018 annual report.

“At this time, no changes will be made to either company’s operations,” the companies said Wednesday. “A process will be set up to decide on the name and image of the new company.”

If the merger goes through, the new CEO will be Jean-François Chalifoux, currently CEO of SSQ. The new chair of the board will be Jean St-Gelais, who is currently chairman of the board and CEO of La Capitale Civil Service Mutual and La Capitale Financial Group Inc.

“The new company will be poised for faster growth and improved competitiveness at a time when the insurance industry is evolving rapidly,” La Capitale said in a release.

SSQ and La Capitale each had more than $2 billion in total gross written premiums, including life and health, in 2018. A merger would make it Canada’s largest mutual, La Capitale said in a release. By largest, that means both P&C and life and health premiums, a La Capitale spokesperson said Wednesday.

In the P&C market, both Economical and Wawanesa were larger in 2018 than La Capitale and SSQ combined.

Wednesday’s announcement comes less than a year after La Capitale merged with LEDOR, a mutual insurer based in Sainte-Claire, Que. That merger took effect June 12, 2019.

La Capitale General owns Mississauga, Ont.-based Unica Insurance and L’Unique General Insurance. In 2008, La Capitale General acquired York Fire & Casualty Insurance Company from Kingsway Financial Services Inc. of Toronto, which announced in 2018 that it would change its jurisdiction of incorporation to the United States. Kingsway at one point owned Jevco. Kingsway now provides warranties for vehicles, fridges and air conditioners but no longer writes property and casualty insurance in Canada.

In Quebec’s P&C marketplace, La Capitale and SSQ ranked third and 10th, respectively, in direct written premiums ($903 million for La Capitale and $258 million for SSQ), according to Canadian Underwriter’s 2019 Statistical Guide.

Canada-wide, La Capitale and SSQ had net premiums written of $1.011 billion and $253 million respectively in P&C. To put their combined size into context, Canada’s twelfth-largest P&C insurer in 2018, Northbridge Financial, had net premiums written of $1.52 billion.


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