CIBC has agreed to sell its property and casualty insurance companies, The Personal Insurance Company of Canada and CIBC General Insurance Company Limited, to Desjardins-Laurentian Financial Corporation (DLFC), subject to regulatory approval.
The sale is valued at approximately $330 million Canadian and represents about 1.5 times the combined book values of the companies. This transaction is expected to be reflected in CIBC’s fourth quarter results.
The decision to sell the property and casualty businesses is aligned with CIBC’s strategy to build shareholder value by focusing on and allocating capital to core businesses that offer the best returns on investment.
This transaction will complete CIBC’s divestiture of insurance manufacturing capabilities. Going forward, CIBC will continue to meet its customers’ needs by distributing third party creditor and travel medical insurance through bank channels and other third-party life insurance products as permitted by regulations.
Together, The Personal and CIBC General have more than 400,000 policies in force, a premium base in excess of $300 million and carry an annual operating expense level of just over $90 million.
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