Desjardins hunting for property and casualty insurance acquisitions

By Maiya Keidan

TORONTO (Reuters) -Canada’s Desjardins Group is seeking acquisitions in the property and casualty (P&C) insurance space as it seeks to boost its presence across the country, CEO Guy Cormier told Reuters on Tuesday.

Cormier said the Quebec-based cooperative financial group is mainly looking at opportunities in Canada where it feels the industry is ripe for consolidation.

"We are in acquisition mode and we are in discussion with some players," he told Reuters, referring specifically to P&C. "We really hope to be able to make a transaction."

Consolidation in the Canadian P&C market has been a theme for some time, but while there was $3.3 billion worth of deals in the sector in Canada announced in 2020, there were just $1.8 billion in 2021 and $50.1 million in 2020, according to data from Refinitiv.

Desjardins is currently one of the largest P&C insurers. It bought State Farm Canada's property and casualty and life insurance business - and its Canadian mutual fund, loan and living benefits companies - in 2015.

The terms of the transaction were not disclosed at the time, but the businesses were being valued at around C$1.6 billion ($1.19 billion).

Canadian insurer Intact Financial is the largest provider in the country of P&C insurance. It boosted its presence in June 2021 when it added RSA Insurance Group plc.

Some market participants had predicted more consolidation in the industry after the global pandemic and catastrophe losses reshaped insurers.

"We thought, like many other players in the industry, that we should have seen more consolidation," Cormier said.

P&C premiums are expected to rise after inflation pushed up prices last year.

($1 = 1.3391 Canadian dollars)

(Reporting by Maiya KeidanEditing by Chris Reese and Marguerita Choy)