Desjardins has made a statement that it is one of the big boys in the insurance channel, says respected industry veteran and former CEO of the Dominion of Canada General Insurance, George Cooke.
“It is going to create quite a power house for Desjardins, if they can actually pull the integration off,” says Cooke. “It’s big news
. I haven’t been able to sit and do numbers, but I gather it makes them the second largest company in the P&C space, behind Intact.”
Cooke shared his take on last week’s blockbuster announcement. And, although Cooke may be a year out of the insurance industry, he still has his finger on the pulse of what is happening in the insurance channel.
“There were rumours for several months all over the place that Desjardins was looking,” says Cooke, who – among a laundry list of board titles and directorships – is mostly kept busy as chair of the board at OMERS and president of Martello Associates Consulting. “I am surprised to some extent that State Farm sold; State Farm made such a substantial contribution of funds a year or two ago when they injected a huge amount of capital and it looked like they were committed to being here (in Canada).
“If they had done this two years ago, it would have surprised me less.”
As a result of last week’s announcement, Desjardins Group will become the second largest property and casualty insurance provider in Canada with annual gross written premiums of approximately $3.9 billion, up from approximately $2 billion. The transaction also strengthens Desjardins Group's position as the fourth largest life and health insurer in Canada, with the deal expected to close in January of 2015. (continued.)