The Bloomberg news agency reported Nov. 5, that Intact Financial Corporation has made an offer to acquire RSA, which is present in Canada through its subsidiary RSA Canada.
Intact has teamed up with Danish insurer Tryg to make its offer totalling £7.1 billion, or C$12.1 billion.
Bloombergreports that Intact would keep RSA's Canadian business and UK division, while Tryg would retain RSA's operations in Sweden and Norway. RSA's Denmark business would be jointly owned by both companies.
RSA would likely recommend the transaction, Bloomberg adds. This is not the first time RSA has been targeted by a competitor. In 2015, a transaction with Zurich failed. The press agency says that Intact has not yet submitted a formal bid to buy the company.
If it goes ahead, this transaction would impact P&C insurance brokers in Canada. For the entire P&C insurance market In Canada, Intact would control close to 20% of the written premiums, compared with nearly 15% today.
Louis Gagnon addresses brokers
Following the disclosure of Intact's offer, Louis Gagnon, President of Intact's Canadian operations, sent a letter to the brokers with whom the insurer does business. The company shared this letter with the Insurance Portal.
“This would be an excellent acquisition for Intact, given the strong strategic fit between the two companies and the solid financial performance that the opportunity presents," Gagnon says. “The acquisition would cement our position as a world-class P&C insurer and create a leading global specialty insurance platform, increasing annual premiums from $12 billion to $20 billion.”
He added that "RSA also offers a point of entry into the UK, where the personal and commercial lines of business could benefit from our operating model and approach based on commitment to customers and data analysis. We have a solid track record of growth, both internally and through acquisitions. Over the past 10 years, we have made eight acquisitions and welcomed more than 7,000 new employees to Intact. Our proven integration approach has benefited our employees, brokers, clients and shareholders," the letter reads.
Gagnon concludes by saying that although brokers probably have questions about this potential transaction, the U.K. regulator forbids Intact from disclosing further information at this stage.
"In the meantime, our businesses remain separate. Brokers will be able to continue to place their business with both insurers as usual. We will provide further information as it becomes available and disclosure is permitted," Gagnon says.