Definity Shifts M&A Focus Towards Carrier Acquisitions
Deal News | Feb 21, 2025 | EIN
Definity Financial Corporation is steering its merger and acquisition (M&A) focus towards insurance carrier acquisitions, as confirmed by President and CEO Rowan Saunders. During a recent earnings call presenting the carrier's fourth-quarter and full-year 2024 financial results, Saunders acknowledged a strategic shift towards acquiring insurance carriers over brokerages, although the latter will still see continued investment. Previously, Definity's strategy hinged on consolidating the broker platform by acquiring large, high-performing brokerages. This approach saw Definity increase its stake in McDougall Insurance, from 25% to 78% by late 2022, and engage in a subsequent merger and acquisition activity, including McDougall's merger with McFarlan Rowlands Insurance Brokers and acquisition of Drayden Insurance. Definity projects continued M&A momentum, aiming for $1.5 billion in managed premiums by 2026. Its broker platform, the 10th largest in Canada, generated $76 million operating income in 2024. Looking to deploy excess capital, Definity is now considering carrier transactions alongside broker acquisitions to further its strategic goals.
Sectors
- Insurance
- Mergers and Acquisitions
Geography
- Canada – Definity Financial Corporation, as well as the brokerages and insurance companies it is acquiring, are primarily based in Canada. The company’s activities have been significant in Ontario and Alberta, Canada.
Industry
- Insurance – The article focuses on Definity's strategic acquisitions within the insurance sector, highlighting moves towards acquiring insurance carriers.
- Mergers and Acquisitions – The core topic of the article involves Definity's changing approach and activities in mergers and acquisitions, a critical aspect of corporate strategy and growth.
Financials
- $250 million – The total investment made by Definity to increase its ownership interest in McDougall Insurance to 78%.
- $1.5 billion – Targeted managed premiums by Definity by the end of 2026.
- $76 million – Operating income generated by Definity's broker platform in 2024.
- $500 million – Value of gross written premiums from a brokerage acquisition made in 2022.
- $400 million – Value of gross written premiums from six brokerage acquisitions made in 2023.
- $200 million – Value of gross written premiums from nine acquisitions in 2024.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Definity Financial Corporation | Bidding CompanyBuyer | Company | A Canadian-based financial corporation focusing on acquiring insurance carriers and brokerages. |
| Rowan Saunders | CEO | Person | The President and CEO of Definity Financial Corporation, providing strategic direction during company earnings calls. |
| McDougall Insurance | Subsidiary | Company | A large Ontario brokerage acquired in stages by Definity, later merged with McFarlan Rowlands Insurance Brokers. |
| McFarlan Rowlands Insurance Brokers | Acquired Company | Company | An Ontario brokerage that merged with McDougall Insurance under Definity's strategic acquisitions. |
| Drayden Insurance | Acquired Company | Company | An Alberta-based insurance company acquired by McDougall Insurance, a Definity subsidiary. |