How much of the industry will change hands in five years: Intact exec

Canada’s largest insurer thinks 15% of insurers will undergo ownership changes in the next five years.

“We predict that about 15% of the existing market shares will change hands in the next five years,” said Louis Gagnon, CEO of Intact Canada during a panel discussion at the Young Brokers Conference.

This would equal approximately 29 M&A deals being made in the next five years, as there are more than 192 private P&C insurers competing in Canada, according to Insurance Bureau of Canada statistics.

“In our business, scale is definitely a real key advantage,” Gagnon said. “In distribution, size is also a big advantage.” 

The broker channel may see similar results around consolidation, with 2022 on pace to exceed 2019’s record high of 40 M&A transactions, according to the Insurance Brokers Association of Ontario.  

“The broker business is one of the most valuable financial assets that exists in North America,” said Gagnon. “Lots of people are in the market wanting to grow and build.”  

“But what’s great about the broker channel — I think it’s also very interesting — is that there’s still a lot of new people coming into [it],” he noted. “There are the larger [brokerages] that are grabbing more, but there’s also creation of new brokers.” 

Given these predictions, insurers and brokers alike can expect to see big markets being lost or gained as a result of increasing M&A.

Intact’s own market share is estimated at 21%, following its notable acquisition of RSA.  

Feature image by iStock.com/baona