Investment - Articles - Intact and Tryg complete their acquisition of RSA Group


Intact Financial Corporation (Intact) announced the successful completion of its joint bid with Tryg A/S (Tryg), a Scandinavian insurance company, to acquire RSA Insurance Group plc for a total cash consideration of approximately GBP 7.2 billion (CAD 12.3 billion).

 This acquisition further strengthens Intact's franchise by positioning the Company as a strong multijurisdictional property and casualty insurer.

 Key Highlights:
 • The deal expands Intact's access to P&C insurance markets outside of Canada and the United States, enhancing the Company's product and geographic diversification.
 • This is the largest acquisition carried out by a Canadian P&C insurer in history. Given the size and international scope of this acquisition, it poses some challenges such as dealing with the higher product risk associated with U.K. specialty insurance lines, integrating organizational cultures, and managing the increased operational risk of cross-border businesses.
 • In DBRS Morningstar's view, the integration of RSA is facilitated by both organizations offering similar products and competing for the same business in Canada

 DBRS Morningstar projects that Intact's annual direct premiums written will increase to approximately CAD 20.0 billion annually going forward from CAD 12.0 billion, an increase of about 67% (see Exhibit 1). This transaction also enhances Intact's presence in the global P&C specialty lines market. DBRS Morningstar projects that premiums written from specialty lines will grow by CAD 1.0 billion to about CAD 4.0 billion annually with a target combined ratio in the low- to mid-90% range. This is similar to the current combined ratio target for the Company's North American specialty business.

 RSA has strong brand recognition in the U.K. and Europe; however, based on the rebranding of OneBeacon to operate as Intact Insurance Specialty Solutions, it is possible that the RSA business could be rebranded after a few years.
  

 Intact and Tryg Complete Their Acquisition of RSA Group

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