Kemper snapped up in Canadian departure

Another U.S.-based property and casualty insurer has decided to pack bags and depart the lackluster Canadian personal lines market. Kemper Canada was recently acquired by the Royal & SunAlliance Co. of Canada for an undisclosed amount. The change in ownership is not expected to result in any significant staff changes, both companies say in a media release.

Kemper Canada’s $75.3 million personal lines book (based on 2000 net written premium) will be absorbed by the Royal & SunAlliance group’s Western Assurance Co. while most of the commercial portfolio valued at about $15 million will be taken over directly by Royal. Under the terms of the deal, the Kemper group plans on retaining its Canadian environmental liability business, as well as commercial business associated with a U.S. parent company.

This “carve-out” business accounts for a very small percentage of Kemper’s book of business, comments current president and chief agent Judy Maddocks. Closure of the deal will mean that Kemper will have to appoint a new chief agent to represent its remaining business in Canada, says Maddocks who plans on an early retirement. “I’m turning 50 years of age this year, and at this stage I’d like to just relax and enjoy myself. You never know what strange things can happen in life.”

Maddocks describes the relationship between Kemper’s personal lines book and that of the Western as a “great fit”. Both companies have pursued a niche writing approach going after more secure auto risks, and the books of business are very complementary, she adds. The official line given by Kemper for its departure from Canada is that the group is refocusing its corporate strategy on “core U.S. business”. However, Kemper Insurance Companies president Bill Smith says the Canadian operation had become too small to compete effectively. With the Canadian book valued at around US$55 million, the decision had to be made to either acquire another company or get out. After having investigated several acquisitional opportunities, nothing of value stood out, so the decision was made to leave, he adds.

Royal & SunAlliance Canada CEO Bob Gunn describes the deal as, “this investment will grow our Canadian business, while also demonstrating our commitment to the independent broker network. It’s an excellent strategic fit, and together we will build something new and exciting.”