What Wawanesa hopes to gain by acquiring Everest Canada

Continuing Canada’s property and casualty (P&C) insurer M&A trend, Wawanesa Mutual Insurance Company today announced it’s entered into an agreement to acquire Everest Insurance Company of Canada, a global specialty reinsurance and insurance firm.

In a press release today, Wawanesa says the transaction will bring an “extensive portfolio of specialty commercial insurance products” that’s expected to add around $305 million in commercial lines premiums annually. That’s roughly a 30% increase over Wawanesa’s current commercial premium volume.

Additionally, the commercial lines – which include cyber, accident and health, aviation, marine, professional liability, and P&C for larger businesses with unique, emerging, or complex needs – will be enhanced by Everest Canada’s established presence in key markets, the release says.

At present, says Evan Johnston, Wawanesa’s president and CEO, the company’s current commercial book is about $1 billion. “There’s very little overlap between commercial businesses at Wawanesa and at Everest….Wawanesa would participate in the small- to mid-market space, Everest would participate above that and in the specialty space,” he tells Canadian Underwriter.

“I think it does nothing but strengthen the relationships with our existing brokers [and] may result in strategic conversations with new brokers. We have an opportunity now to provide our existing brokers with a different suite of products than we’ve had before.”

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Further, commercial lines help the insurer diversify away from personal lines. “It’s no secret that some of the regulated product has been challenging to navigate. For example, Alberta has been challenging to navigate,” Johnston says.

Plus, while Everest Canada does business across the country, its book is concentrated in Ontario and Quebec, which increases Wawanesa’s geographic diversification.

“Being a commercial book in an area that we don’t currently operate is a great diversifier from the traditional personal lines…environment,” he says. “To be very clear, this is an opportunity for us to launch at a point where we have scale now with this business, but the intention is definitely to grow it.”

While total insurance revenue data from CU’s 2025 Stats Guide, which cites 2024 data from MSA Research, suggests the acquisition won’t place Wawanesa among Canada’s Top 5 insurers, Johnston says “it provides a path for us to get there, and…frankly, what’s more exciting to me is that now we have the relationships, the talent, to be able to drive this business.

“We want to play on par with the largest players in this country. We believe that we are well positioned to do that…,” he adds.  

“As a mutual we do take a long-term approach to business and relationships. And that’s what we’ll continue to do. We’re not done yet. We’re just getting started. I believe we have the right team, the right structure, the right employees. And now we’re much closer to having the right asset base to really make bold moves in this market and be a real, strong player. We’re no longer a small, prairie mutual.”

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In terms of funding the acquisition, Johnston tells CU that “After years of stability, we’ve built a balance sheet of over $11.5 billion of assets and a strong financial rating with AM Best.” He adds: “That foundation, together with the operational excellence we demonstrated recently has allowed us to generate enough internal capital to fund this [acquisition].”

To implement the transaction, Wawanesa says it’s entered into a purchase and sale agreement with a wholly owned subsidiary of Everest. Under the agreement, Wawanesa will acquire all issued and outstanding shares of Everest Canada.

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Once the transaction closes, Everest Canada will enter into a Loss Portfolio Transfer Reinsurance Agreement with Everest Reinsurance Company (a Delaware reinsurance company and subsidiary of Everest) operating through its Canadian branch. Pursuant to that agreement, exposure to all liabilities of Everest Canada with respect to insurance policies issued by Everest Canada prior to the transaction’s closing will be retained by Everest. Everest Canada will continue to administer claims with respect to these policies on Everest’s behalf.

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Johnston tells CU there are no issues related to a mutual acquiring a publicly traded entity, because while Everest is publicly traded, its subsidiary Everest Canada is not. “It will become a subsidiary of Wawanesa. We intend to support that separately and retain and continue to support all the key personnel so that they can continue to lead the business,” he adds.

Everest Canada and Everest will also enter into a Transition Services Agreement, under which an Everest affiliate will provide certain transition services to Everest Canada for a period of time after the transaction’s close.

The transaction is subject to regulatory approvals and is expected to close in fourth quarter 2026.

Phil Porado

Phil, an award-winning journalist with over 30 years of experience in financial topics, has been managing editor of Canadian Underwriter for more than three years.