The Travelers Companies Inc. (NYSE: TRV) has agreed to acquire The Dominion of Canada General Insurance Company from E-L Financial Corporation Limited for approximately $1.1 billion in cash, subject to adjustment.
The Dominion and Travelers’ Canadian operations will be integrated and the combined organization will remain headquartered in Toronto. The deal is expected to close 2013 Q4, subject to regulatory approval and other customary closing conditions.
It has not yet been determined how the new company will be branded.
“The combination will substantially enhance Travelers’ product breadth in Canada by coupling The Dominion’s commercial and personal portfolios with Travelers Canada’s surety, management liability and commercial middle market products,” said George Petropoulos, president and CEO of Travelers Canada, who will help lead the new organization as vice chairman. He will also be executive vice president of bond and financial products.
“We plan to leverage the expertise of both companies, and we will work closely with The Dominion team to assure a smooth transition for employees, customers and brokers.”
The Dominion’s advocacy on behalf of the broker channel in Canada is legendary, and its broker force is among the jewels in the crown for Travelers, which has a strong broker force in the United States.
“The Dominion’s extensive distribution network and established customer base provide us with an exceptional platform for expanding our commercial lines business and generally strengthening our presence in Canada,” said Alan Schnitzer, vice chairman and head of Travelers’ financial, professional and international Insurance business segment.
“The combined business will benefit from Travelers’ sophistication in the use of data and analytics, as well as claim and risk control capabilities. We look forward to welcoming The Dominion’s talented employees and management team to Travelers.”
Brigid Murphy, president and CEO of The Dominion, will continue in these roles at the combined organization. In addition to acting as vice chairman for the combined organization,
“This is the perfect match for The Dominion,” said Murphy. “Travelers is a recognized leader in the insurance industry, with a well-deserved reputation for excellence. We are looking forward to working with the Travelers Canada team as we begin this exciting new chapter, while continuing our commitment to the communities and organizations we serve.”
Shelagh Paul, vice president of corporate communications at The Dominion, described how the deal met The Dominion’s objective of a balanced portfolio.
“The Dominion has clearly been focused on expanding and strengthening our commercial portfolio over the last few years largely because of the need to alter the business mix in favour of commercial lines to help offset the concentration we have in Ontario auto,” she said. “When you put The Dominion and Travelers together, you achieve that result.”
Also, Paul said, The Dominion stands to gain “a significant lift” from Travelers’ data and analytics sophistication.” Match these together with the personal lines capabilities and systems that The Dominion has in place and the personal lines platform of the combined organization is remarkably strong,” she said.
“"It is a good a fit for both companies, and for brokers. Brokers gain expanded market. Now, what you have is a large, capable, multi-line, A+ rated company that can truly go to bat with competitors here. If you are a broker, you are likely happy because the market opportunities are significant. This is definitely a plus for the Canadian marketplace.”
