ING and Zurich form Canadian alliance in asset swap deal

ING Canada and Zurich North America Canada have concluded a deal through which the Dutch financial services company will acquire the latter’s property and casualty personal lines insurance book. In turn, Zurich will renew the large commercial and corporate risks previously underwritten by ING. No value has been attached to the deal, and it appears the arrangements agreed to are a form of "asset swap" type transaction. A joint statement released by the two companies describes the deal as a "strategic alliance" boosting their combined Canadian p&c marketshare to 15%.Both ING and Zurich will market all of the insurance products available between the two companies via their broker distribution networks. ING will, however, retain its commercial business not falling into the category of "large risks". It is expected that the deal will increase ING’s insurance premiums by $460 million to a total for 2002 of about $2.8 billion pegging the group’s share of the insurance market at around 12%. Zurich expects its annual premiums for 2002 will rise to approximately $550 million. The deal will also boost Zurich’s stake of the Canadian large commercial/corporate risk market to around 21%.Around 1,000 Zurich employees involved with personal lines business will now become part of ING’s work force, the companies say in a statement. Zurich will retain its life business in Canada as well as World Travel Protection, a wholly-owned subsidiary. Neither company has revealed whether the deal will result in cost-cutting measures. "The strategic alliance and its expanded distribution network will allow us to improve the scale of our activities and offer a more compelling value proposition to insurance brokers," says ING president Claude Dussault. Zurich president Barry Gilway adds, "we [Zurich Canada] have a leadership position in the large commercial and corporate business, and we play a pivotal role on behalf of international corporate customers operating in Canada".