Former mutual company, Definity Financial Corporation, is one year into an ambitious 10-year plan to triple the company’s size, growing it into a top three player in the property and casualty (P&C) space.
The plan, says Definity’s president and CEO, Rowan Saunders, is to continue growing organically at twice the industry’s average rate, while also adding to its size by acquiring other companies.
“Is it realistic? I think outperforming the industry growth organically is realistic,” Saunders told investors gathered at the Desjardins Inaugural Toronto Conference in late November. As for mergers and acquisitions (M&A), he says the market is consolidating. Combined with the company’s organic drivers, he says this gives the company and its board of directors “quite a bit of confidence” that tripling in size is a realistic 10-year target.
In the wide-ranging conversation, Saunders also discussed the company’s technological investments, its investment in Sonnet, which is breaking seven years after its launch, and what key metrics the company is watching which should indicate whether the company’s acquisition of Travelers’ Canadian operations is successful or not.
On Sonnet
When asked to discuss his top three or four priorities, the strategic investment Definity made in the fully digital insurance business model is very close to the top of Saunders’ list. “I think that we see changes in the marketplace that are going to be exciting in personal insurance. We spent a lot of time and effort in the last few years working and trying to get that business model to work the way we’d like it to. I think we feel the best we’ve ever felt about that business,” he says.
He agrees that part of getting Sonnet to profitability involved pulling out of the Alberta personal auto market. He adds that he expects to see an acceleration of pure digital business going forward, particularly when compared to traditional, direct business. “People used to be comfortable going to an agent in the local mall. They used to be comfortable going to a contact centre; that’s traditionally how most of the direct insurers in Canada operate. What we feel is unique with Sonnet is it’s the only fully digital direct (business). We have no underwriters in that business. That is starting to get more traction with consumers,” he says.
Similarly, the company’s investment in technology has also allowed it to quote small commercial business, through brokers, in one to two minutes. “That’s unbelievable,” he points out. “When I was many years ago in the business, it would take a few days to do something like that.”
Travelers deal progresses
The Travelers deal, meanwhile, he says is expected to close in the first part of the first quarter of 2026. “This is a transformational deal for us,” he told the group gathered. “As we take possession of that company, it gets us to be a top five player and really will bring a lot of capabilities.”
He says key metrics defining the deal’s success will be top talent retention, retention of the existing business and improving loss ratios within a couple of years. He describes the Travelers business as a good portfolio with good intellectual property, products, a good reputation and lots of talent.
“We had an objective of being a top five player. We’ve now achieved that. We’ll update that now to a top three player.” He adds that the Travelers deal helps by growing the company’s market share and also by giving it new capabilities. “It solidifies our position,” he says. “I think brokers look at us in a different light than they did before. I think that, actually, is (also) transformational.”
