Meloche Monnex buys out Canada Life Casualty

Meloche Monnex Inc., the property and casualty arm of TD Bank Financial Group, has acquired the property and casualty insurance business of Canada Life. In return, Canada Life Assurance Company will take over the group savings business of TD Canada Trust, as well as receive a net cash payment of $75 million.

Meloche Monnex will complete a share acquisition of Canada Life Casualty Insurance Company equivalent to $150 million in written premiums for the year ending September 30, 2000. The purchase was attractive, according to Meloche Monnex CEO Alain Thibault, because the two p&c operations are a “good fit”. Both specialize in affinity business, and share offices in the same cities, spread across the country. It was also a chance for Meloche Monnex to continue its “aggressive development plan”.

“We’ve had a lot of growth organically,” notes Thibault. Between 1999 and 2000, the company achieved $100 million in premium growth. The acquisition solidifies its position as the number two direct response p&c insurer in Canada with combined premiums of $525 million. The purchase also brings in extra money to pay for investments in technology. “We’ve made very significant investments in technology. A broader base of premium pays for this,” he says. And while Thibault expects little to change in terms of day-to-day operations, he notes that the most significant transition will be to convert Canada Life to their computer systems and operations. Thibault says offices will not necessarily be consolidated, but a consistent approach to customer service will have to be developed.

As to future acquisitions, Thibault says that the company would not shy away from any opportunity, but it is unlikely such a good match as Canada Life Casualty will be found. “The reality is that there are not a lot of good fits” on the market. In terms of Canada Life’s group savings business, the TD acquisition brings in assets under administration of $5.1 billion, including defined contribution pension, group RSP, profit sharing and stock plans. This will make Canada Life the new market leader, with combined assets under administration of more than $10 billion.