It was appropriate to move forward the purchase of ICPEI, says Valérie Lavoie

Valérie Lavoie, president of Desjardins General Insurance (DGAG), has confirmed that the acquisition of the entire share capital of the Prince Edward Island Insurance Company (ICPEI) was expedited from when the financial services cooperative first became a minority shareholder in December 2022. 

Originally, Desjardins had planned to purchase all the shares within a three to five-year timeframe.

“It’s a very strategic transaction for us to proceed right now. Why in March 2024? We want to accelerate our strategy. We’ve set a clear vision, we have ambitions, and we felt it was better to act sooner rather than later. We faced fewer constraints doing it now than later,” Lavoie stated. 

This comment was made during a brief interview with Insurance Portal, on the sidelines of her attendance at the closing session of the Property and Casualty Insurance Day on March 28. The event gathered other senior executives from the property and casualty insurance sector. 

The announcement of the purchase was made on March 27. At the time ICPEI was privatized, the share price offered to shareholders was $4 per share, with the insurance firm’s market value estimated at $59.2 million. 

DGAG had initially acquired 27.5 per cent of the circulating shares, equating to an acquisition cost of $16.7 million, rounded to $17 million in Desjardins’ management report as of December 31, 2022. 

Lavoie declined to disclose the acquisition price for the remaining shares. It’s possible that the transaction cost will be revealed in an upcoming financial results release by Desjardins, she hinted, adding: “For strategic reasons, we cannot disclose the amount.” 

Growth in Premiums 

According to information provided by DGAG following the interview, ICPEI’s premium volume in Quebec reached $70 million in 2023, with $42 million in business insurance. 

ICPEI began underwriting risks in Quebec in March 2021. That year, the premiums in the province totaled $19.4 million. By 2022, the volume had increased to $43.2 million. 

In Canada, ICPEI’s underwritten premiums grew from $102 million in 2022 to $130 million in 2023, notes Lavoie. “You’re right, the premium volume is experiencing significant growth,” she said, without specifying whether this would impact the final cost of the acquisition. 

Business Insurance Focus 

DGAG’s interest in finalizing the transaction particularly concerns business insurance. “We have big ambitions in this market, both at Desjardins and with this property and casualty insurer, to grow our business insurance operations,” she remarked. 

The expertise of ICPEI’s executives, particularly that of Serge Lavoie, “will enable us to achieve our ambitions,” Lavoie added. 

For its continued expansion, ICPEI will rely on the financial capabilities provided by Desjardins. “Absolutely, and that’s one of the reasons for the transaction. We are giving ICPEI the stability of the Desjardins Movement and additional capabilities to continue its growth,” she emphasized. 

Growth will initially focus on ICPEI’s current territories, including the Maritime provinces, Quebec, and Ontario. “After that, we’ll see if we continue elsewhere,” she noted. 

ICPEI is active in more specialized or larger business insurance niches than those handled by Desjardins agents. Through the brokerage network, ICPEI is better equipped to serve these clients. 

The synergy brought by ICPEI and the brokerage network will help Desjardins enhance its presence in the business insurance market, Lavoie affirmed.