Definity Financial Corporation reported a 2.8 per cent decrease in net income attributable to common shareholders in 2025 compared with the previous fiscal year.
Net income attributable to common shareholders totalled $418.2 million in 2025, compared with $430 million for fiscal 2024.
Announced on May 27, 2025, the acquisition of the majority of Travelers’ Canadian portfolio had a modest impact on the company’s expenses in the quarter ended December 31, 2025. Integration-related expenses of $74 million contributed to a reduction in fourth-quarter 2025 net income, which totalled $58 million compared with $116.6 million a year earlier.
The $3.3 billion transaction, officially closed on January 2, 2026, enables Definity to increase its gross written premiums by more than 31 per cent, the company noted in its results released on February 12. This additional volume will now allow it to rank among the top five property and casualty insurers in Canada.
“As we welcome our new colleagues, we begin a new era for Definity, one that is grounded in our ambition to build a Canadian champion and to continue delivering on our commitment to help our customers and communities adapt and thrive,” stated Definity CEO Rowan Saunders.
At the end of November, commenting on the 10-year strategic plan now in its second year, Saunders did not conceal Definity Financial Corporation’s ambition to triple its size by 2034.
Underwriting result
For the full year, underwriting income reached $355 million in 2025, compared with $212 million in 2024. This 67 per cent increase is attributable to strong results in personal property and commercial lines, the company notes in its documentation.
For the full year, catastrophic losses added 3.4 percentage points to the company’s combined ratio, compared with 6.4 points in 2024. Related expenses declined from $246.2 million in 2024 to $143.5 million in 2025.
Premiums
Direct written premiums totalled $4.8 billion in 2025, up 8 per cent compared with the $4.4 billion reported at the end of the previous fiscal year.
Direct written premiums in personal lines reached $3.3 billion in 2025, representing an increase of $240 million, or 8 per cent, over premiums written in fiscal 2024.
In its management’s discussion and analysis, the company indicates that 59 per cent of premium volume written in 2025 was generated in Ontario, the same proportion as in 2024. Approximately 15 per cent of premium volume came from policyholders in Alberta and the other two Prairie provinces, 12 per cent from British Columbia, 7 per cent from Quebec and 7 per cent from the Atlantic region. This regional distribution changed little compared with the previous year.
The broker distribution channel accounted for 92 per cent of Definity’s direct written premiums in 2025, compared with 91 per cent in the prior year.
Personal auto represents approximately 41 per cent of Definity’s premium volume, while home insurance accounts for 27 per cent.
Commercial lines
The company recorded an increase of $120 million, or 8.6 per cent, in direct written premiums in commercial lines, which totalled $1.5 billion in 2025.
Commercial lines’ share of the company’s total volume rose from 31 per cent in 2024 to 32 per cent in 2025. Net underwriting income in this segment increased by 11.6 per cent in 2025, the company states in its management’s discussion and analysis.
The addition of premium volume acquired through Travelers is estimated at $500 million, which will increase Definity’s commercial gross written premiums by 34 per cent.
Combined ratio
On claims performance, Definity’s combined ratio stood at 91.6 per cent in 2025, compared with 94.5 per cent in 2024, an improvement of 2.9 percentage points.
In personal lines, the combined ratio was 92.5 per cent in 2025, compared with 96.5 per cent in 2024, a difference of 4 percentage points. The improvement was more pronounced in home insurance, with a decrease of 7.8 percentage points, compared with 1.6 points in auto insurance.
The reduction in claims costs was particularly notable in home insurance, where the loss ratio declined from 62.7 per cent in 2024 to 55.4 per cent in 2025. In personal auto, the decrease in the loss ratio was more modest, from 71.1 per cent in 2024 to 69.7 per cent in 2025.
In commercial lines, the combined ratio was essentially unchanged at 89.3 per cent in 2025, compared with 89.4 per cent in 2024. Year over year in this segment, the loss ratio increased by 0.3 percentage points, while the expense ratio decreased by 0.4 points.
Broker distribution presence
For fiscal 2025, Definity reported $62 million in earnings from its distribution activities through its ownership interests in brokerage networks. That represents an 8 per cent increase over 2024, when earnings stood at $54 million.
Revenue generated from this brokerage investment totalled $229.4 million in 2025, up 23 per cent year over year.
The combined volume of brokerages within its platform was estimated at $1.5 billion as at December 31, 2025. The approximately 10 acquisitions completed in 2025 added about $164 million in premium volume, the company indicates in its management’s discussion and analysis. Definity is targeting $2 billion in premium volume for its brokerage platform by the end of 2027.
Conference call with analysts
During the conference call held on February 13, 2026, in response to a question from analyst Paul Holden of CIBC, Saunders acknowledged that competition for large commercial accounts is intense. However, he estimated that about 5 per cent of Definity’s overall portfolio is exposed to that competition.
Appointed in January 2026 as Executive Vice-President, Commercial Insurance, Obaid Rahman confirmed that assessment of the significance of large commercial accounts. He added that the company has experienced solid growth in its commercial volume over the past five or six quarters. Although competition has intensified in certain segments over the past 18 months, the profitability of Definity’s portfolio exceeds that of the industry, he says.
“For small and mid-sized business, what matters is speed, ease of doing service, service. And technology is really the differentiator,” he said. According to him, the Vyne platform enhances efficiency in interactions with the brokerage network.
Rowan Saunders also commented on the impacts of acquiring the Travelers volume. “We are confident that we’ll deliver at least $100 million in annual costs synergies to be realized over the three-year integration period,” he said.
Rahman estimates that integration of the Travelers portfolio into Definity’s commercial insurance platform will be completed by early 2027. The company does not expect to retain all customers associated with the $1.5 billion volume acquired from Travelers.
Regarding improved performance in personal auto, Saunders notes that, among all the elements, “Sonnet is one of the pieces that is now much better than it was over the last couple of years. So that drag has now disappeared as we said it would.”
Premium volume distributed directly by agents of the Sonnet and Petline subsidiaries totalled $361 million in 2025, down 8 per cent from the $391 million reported in 2024.
Definity announced in June 2024 that Sonnet would cease offering auto insurance in Alberta as of mid-December 2024. Without Sonnet’s withdrawal from the Alberta personal auto market, premium volume would have been maintained, the company states in its management’s discussion and analysis.
