Toronto-based Meloche Monnex, a subsidiary of Toronto-Dominion Bank, has agreed to acquire Liberty Mutual Group’s Canadian automobile and homeowner insurance operations for an undisclosed price.
When the acquisition is completed, Meloche Monnex will become Canada’s largest direct-response P/C insurer and one of the top four P/C insurers in Canada for personal lines with more than 1,300,000 policyholders and over C$1.4 billion (U.S.$1.08 billion) in written premiums.
The transaction is subject to regulatory approvals and is expected to close in April 2004.
Liberty Mutual’s Canadian operations included in the acquisition had written premiums of more than C$390 million (US$264.6 million) for 2003, with 350,000 active policies and a work force that employs 775 people. Its headquarters are in Markham, Ontario, with 24 personal insurance sales offices located in Calgary, Edmonton, the Greater Toronto area, Southern Ontario, Ottawa, Peterborough, Greater Montreal and Saint John, New Brunswick. The Canadian operations are conducted through a branch of Liberty Mutual Insurance Company and a wholly-owned subsidiary, Liberty Insurance Company of Canada.
“This acquisition will solidify Meloche Monnex’s position as an insurance leader through the addition of a broad-based clientele while strengthening our employer group market share,” stated Alain Thibault, the company’s president and CEO. “In addition, it will reinforce our existing presence in strategic markets, particularly Ontario. Liberty Mutual’s expertise will also complement that of our own personnel.”
He added that Meloche Monnex’s operating expenses are the lowest in Canada and, with the combination of the two portfolios, the transaction will increase Meloche Monnex’s critical mass for investments in technology and other sectors to produce additional efficiencies and enhance client service.
Liberty’s executive vice president, Personal Market, J. Paul Condrin III, noted that the group’s growth strategy for personal lines is “primarily focused on our U.S. operations, where we have the scale to operate most efficiently for our customers – something we do not have to adequately address the complexity of the Canadian insurance market.” He indicated that “Meloche Monnex will deliver the same superior service to our customers, and rewarding growth opportunities for our employees that each have been accustomed to from Liberty Mutual.”
Condrin also noted that Liberty Mutual continues to provide commercial insurance products and services through Liberty International Underwriters Canada. Headquartered in Toronto, the division provides tailored insurance solutions across a wide variety of industry sectors including energy, manufacturing, retail and financial services.
Topics Mergers & Acquisitions Auto Canada
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