Intact welcomes new exec, specialty products with closing of OneBeacon acquisition

The Canadian insurer is expecting to make tech and entertainment coverages available this year

Intact Financial Corporation (IFC) announced on Thursday that its acquisition of U.S. specialty insurer OneBeacon Insurance Group Ltd. is now completed. With that news, IFC is welcoming a new face to its executive team and anticipates that it can offer OneBeacon’s products to Canadian customers in the fourth quarter.

The $2.3 billion transaction means that IFC now has more than $2 billion in combined annual premiums that focus on small to midsize businesses. The Canadian insurer’s objective is to grow its new specialty lines business in the U.S. and operate at a combined ratio in the low 90s within the next 24 to 36 months.

Related: Intact Financial buys U.S. specialty insurer for C$2.3 billion

Mike Miller, former CEO of OneBeacon, joins IFC’s executive team as president of U.S. and specialty solutions. Miller will report to Charles Brindamour, CEO of IFC.

By the end of the year, IFC will offer OneBeacon’s specialty products and services in Canada, beginning with technology and entertainment risks.

“New capabilities will provide coverages for all lines of business for technology risks including third-party cyber and professional liability for manufacturers of electronics, software and IT service providers, and the telecommunications industry,” states the announcement.

Related: Intact gets go-ahead for OneBeacon Insurance purchase

“For the entertainment industry, comprehensive commercial insurance solutions for motion picture, television and documentary film makers will be offered, as well as for businesses associated with the motion picture and television industry,” the announcement continued.

IFC has also established a cross-border facility in order to further facilitate its cross-border offering of products and services. “This seamless cross-border experience and broader geographic footprint will strengthen our ability to compete with other large international insurers,” said Charles Brindamour, CEO of IFC, in a statement.

Related: Canada’s P&C players keen on M&A, but not enough companies for sale: KPMG

The acquisition is expected to add to net operating income per share within 24 months. The financing has been structured to maintain balance sheet strength with debt to capital and minimum capital test ratios of approximately 25% and 200% respectively at closing. The debt-to-capital ratio is targeted to be below 20% within 24 months. Additionally, a reinsurance arrangement has been entered into to provide significant downside protection against adverse reserve developments, the announcement states.

 

 

Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.