Definity to Acquire Travelers Canada in $3.3-Billion Deal
What’s the Big News with Definity?
Definity Financial Corporation is making a bold move, it’s buying most of Travelers’ Canadian operations (excluding its surety business) for a whopping $3.3 billion CAD (that’s about US$2.4 billion). The deal is set to wrap up in early 2026, as long as the necessary regulators give it the green light.
Travelers Canada is no small player. It’s a national property and casualty insurer with roughly $1.6 billion in gross written premiums each year. Its portfolio includes commercial, specialty, and personal insurance lines, giving it a wide reach across sectors.
Why Is Definity Buying Travelers Canada?
The acquisition will complement its existing operations, broaden its product offering, and enhance its expertise. According to Rowan Saunders, President and CEO of Definity, the move aligns with their growth strategy and will help diversify their portfolio while delivering more value to shareholders.
This transaction is set to boost Definity’s combined annual premiums to around $6 billion. Specifically, commercial lines premiums will rise by about $600 million (a 40% increase), and personal lines will go up by around $1 billion (a 30% jump). This growth will push Definity into the top four property and casualty insurers in Canada.
Definity expects the deal to be immediately accretive to its operating earnings per share, with double-digit growth projected within three years. The company also forecasts about $100 million in pre-tax expense synergies, an internal rate of return above 20%, and an improvement in operating return on equity by more than 200 basis points.
Definity will buy all issued shares of several Canadian insurance subsidiaries currently held by Travelers. However, Travelers will retain its Canadian surety operations and one Canadian branch. To smooth the transition, assumption reinsurance agreements are being arranged to transfer certain lines of business, pending regulatory approval, of course.
What Does Definity’s Acquisition Mean for Travelers Canada Employees?
When a major acquisition like Definity’s $3.3 billion deal to buy most of Travelers’ Canadian operations takes place, corporate restructuring is often part of the transition. This can lead to significant changes within both the acquired and acquiring companies, including layoffs, job reassignments, or altered roles.
If you’re an employee at Travelers Canada and your role is impacted by this acquisition, it’s crucial to understand that you have legal rights. In Canada, non-unionized employees may be entitled to severance pay that goes well beyond initial offers, depending on your length of service, position, age, and terms in your employment contract.
At Whitten & Lublin, our employment lawyers have extensive experience helping employees navigate terminations, layoffs and severance packages. Contact us today online or call (416) 640-2667 for a consultation to ensure you’re receiving the full compensation you’re legally entitled to.