WINNIPEG — The Canada Life Assurance Co. has signed a deal to buy ClaimSecure Inc., a company that provides health and dental claim management services to Canadian employers.
Canada Life says the acquisition grows its role as a third-party payer and third-party administrator, which provide a variety of services for employers that offer benefits.
Canada Life executive vice-president Brad Fedorchuk said the company isn't disclosing financial terms of the transaction but he said it offers potential for growth.
"Canada Life has not had as big a footprint in the third-party payer and third-party administrator space, so this will give us significant growth in that market channel," Fedorchuk said.
ClaimSecure's customers are about 7,000 employers with providing benefits for about 1.125 million Canadians, including 400,000 employees plus their dependants.
"There would be little if any duplication of customers within that base," Fedorchuk said.
"The customer base that ClaimSecure already has (is) going to be a significant amount of growth for Canada Life right out of the gates," he said.
ClaimSecure will also continue to operate under its own identity, he said.
In addition, he said, there's a chance for Canada Life to use ClaimSecure's expertise to expand the type of service it can offer to its own customer base.
As an example, ClaimSecure has the ability to provide white-label services — such as handling claim documentation and call centres under the employer's brand.
"So that's important for us. There are customers that want white labelling services (and) ClaimSecure will give us an opportunity to provide that," Fedorchuk said.
ClaimSecure has more than 300 employees, who will remain at its main operations centre in Sudbury, Ont., and its head office in Mississauga, Ont., Fedorchuk said.
The deal, which is subject to regulatory approvals, is expected to close in the third quarter of this year.
CIBC World Markets analyst Paul Holden said in a research note that the value of the ClaimSecure investment is probably less than a $340-million deal also announced Tuesday by Great-West Lifeco Inc., Canada Life's parent.
Great-West said its Irish Life Group has an agreement to pay 230 million euros to buy Ark Life Assurance Co., which manages a range of pensions, savings and protection policies for the Irish market.
Great-West Lifeco said the purchase of Ark Life from Phoenix Group Holdings PLC is subject to regulatory approvals and is expected to close in early 2022.
This report by The Canadian Press was first published July 13, 2021.
Companies in this story: (TSX:GWO)
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Note to readers: This is a corrected story. A previous version included a misspelling of Fedorchuk.