Desjardins expands into broker channel through M&A deal
Direct writer Desjardins is acquiring the Insurance Company of Prince Edward Island (ICPEI), an insurer that distributes solely through the broker channel.
“With this acquisition, we’re strengthening Desjardins’ position in the Canadian commercial insurance market,” Guy Cormier, Desjardin’s president and CEO, said of the deal Wednesday.
“We’re committed to meet the changing needs of our business members and clients across Canada and be proactive in our support. That’s why we’re very pleased to be able to count on ICPEI’s expertise in brokerage distribution of commercial insurance to expand our reach and access new markets.”
ICPEI’s commercial offerings include commercial auto coverage, commercial property, commercial general liability (CGL), boiler and machinery, business interruption, and data compromise coverage. Desjardins says deal is intended to diversify its insurance offering to meet the needs of small and medium-sized businesses in Canada.
Desjardins says it will offer these commercial insurance products through insurance brokers who work with ICPEI, as “a complement” to Desjardins Group’s direct channel and network of exclusive agents.
“This acquisition is clearly in line with ICPEI’s strategic goals to expand insurance distribution across the country and pave the way for even greater collaborations on the Canadian market,” says Serge Lavoie, president and CEO of ICPEI. “Desjardins is a strong financial leader, and this partnership will accelerate our growth to become a major player in insurance distribution with brokers.”
Desjardins is the third-largest insurer in Canada, with a 9% market share, based on net premiums written of $6.04 billion in 2022, per MSA Research stats published in the 2023 Canadian Underwriter Stats Guide.
ICPEI has a market share 0.05% based on net premiums written (NPW) of $33.1 million in 2022, according to MSA Research stats.
Founded in 1998, ICPEI Holdings Inc. operates in the Canadian property and casualty insurance space through ICPEI, its wholly owned subsidiary.
Desjardins had announced its intent to acquire ICPEI in full when it acquired a minority interest in the insurer in 2023. At the time, it intended to acquire ICPEI over a thee- to five-year horizon.
“The organization then decided to expedite this process, based on market conditions, opportunities and ICPEI’s progress on the commitments it had made to strengthen their partnership,” Desjardins announced. “Desjardins has exercised its call option to acquire these shares ahead of the original plan.”
The deal will close subject to regulatory and other approvals.
Feature image courtesy of iStock.com/metamorworks
