The following article is solely the opinion of the author and does not reflect the views of her employer.
The Canadian P&C insurance industry is consolidating through strategic mergers and acquisitions. In a recent deal worth $3.3 billion, Definity’s acquisition of Travelers Canada boosts Definity’s gross written premiums (GWP) by roughly one-third to $6 billion and moves it from the sixth to the fourth-largest P&C insurer nationally. This acquisition adds $1 billion in personal lines and $600 million in commercial lines premiums, substantially broadening Definity’s risk portfolio. Central to Definity’s strategy was its 2021 demutualization — the first in Canadian P&C history — which unlocked access to capital and enabled participation in large-scale consolidations.
Meanwhile, Beneva, Canada’s largest mutual insurer, announced plans to merge with Gore Mutual, one of the country’s oldest mutual insurers, allowing the insurers to scale without demutualizing. The merged organization will have close to $8 billion in total premium volume across life and P&C lines, with about $3 billion in P&C premiums, positioning Beneva-Gore among the top 10 P&C insurers nationally. The merger preserves Gore’s 180-year heritage and mutual governance, highlighting consolidation achieved through a merger rather than an acquisition.
More broadly, several international insurers — including Farmers, AIG, Allianz, and CNA — have recently reduced their Canadian operations. Between the complex Canadian regulatory environment and climate-imposed shifts in risk, these insurers no longer see a path forward in Canada, leaving fewer options for insureds.
What this means for actuaries:
These moves highlight the role of tech and data — modern technology facilitates these deals and enables the companies to more quickly leverage their newfound resources. Consolidation enables scale to address the ever-present challenges of economic uncertainty, demographic shifts, and compliance costs. With greater capitalization, these larger companies are better able to weather the insurance cycle, providing confidence and protection for their customers.
These mergers and acquisitions will continue to evolve the Canadian insurance market. The P&C insurance industry has several foreign players who may decide to pull out of the market, keeping an eye on whether they can manage to support their scale within the Canadian market with increasing insurance risk. For customers, while lower prices due to economies of scale and expense reduction are possible, it is more likely that less competition and fewer options will result in higher prices. For actuaries, this reinforces the need to consider portfolio diversification and adequate capitalization. The impact of climate change on insurers’ books is also becoming a higher priority, especially for those companies that are more geographically diversified.
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