ING Insurance emerges Intact

When ING Groep announced in February 2009 that it would be selling its shares in ING Canada to public shareholders, ING Insurance Company of Canada subsequently re-branded itself to reflect its new, independent identity.

Intact Insurance Company of Canada is the new name of ING Canada’s insurance operations. In May, the holding company ING Canada is expected to adopt the new name of Intact Financial Corporation, pending shareholders’ approval.

Why Intact, brokers selling the insurer’s product might ask (and have asked)?

Louis Gagnon, president of Intact Insurance Company, said the name was selected because it reflected the basic story of what his insurance company does for its clients: It brings them intact during a difficult period in their lives.

“The first thing we wanted the name to represent is not what we are, but what we do for clients, really — the customers,” Gagnon said in a sit-down interview with Canadian Underwriter. “That was our objective:What kind of name that people can relate to in general?”

Gagnon said the Intact name was selected in part because brokers and clients would find it easy to remember the story behind the name. How so? For brokers and consumers, the word “intact” reflects the basic relationship between the insurer and the consumer.

“We said:’Let’s try to find a name that [suggests the story] of customers having a good time in their life, then they have a claim, they have a bad time in their life, so let’s try to make sure that during that bad time, we take care of them and bring them intact, continue their lives as they were before,'” Gagnon said. “That’s the basic thinking behind where that comes from.”

Gagnon said it took about two to three months of painstaking internal meetings to come up with the name. And he expects that by May 2009, the company will have succeeded in changing over to its new name throughout 85% of its operations. Brokers will have received communications from Intact by the time this article is published. At press time, Gagnon was going to a national road show to talk to brokers about the change in identity.

But while ING Insurance Company of Canada is no more, Intact Insurance will not look or act appreciably differently from its predecessor. The structure of the organization has not changed at all, its capital base remains as independent as it has been for the past four years, and certainly the growth strategy of the company remains the same.

As of press time, the company was the subject of media speculation that it was poised to make a major acquisition, although potential targets were unverifiable. Certainly Intact is not shying away from the fact that it is looking to grow.

“We have a very strong balance sheet right now, very strong,” said Gagnon, whose company was among the few to make an underwriting profit in 2008 (Cdn$26.7 million), according to MSA Research. “We have excess capital. We don’t have any debt on our balance, so we are more on the buyer’s side for sure. There are going to be, we think, some opportunities in the future to do some acquisitions, and I think we’re in a very good position to do that.”

Gilles Gratton, vice president of corporate communications for Intact Insurance, said the company now carries a sizeable war chest to make a deal. “Basically if you look at the financial situation of the organization right now, we have the capability to do a $1.1 billion acquisition right now.”

Gagnon says the acquisition strategy is unimpeded by the shrinking credit available in Canada to finance a significant merger. “Strong players, strong companies are always going to be in good position in any kind of market,” he says. “I think we’re a strong player.”

Eight major institutional investors bought up the initial offering of shares, and 440 other investors followed up by acquiring the rest. Individually, no investor owns more than 7% of the company; investors must disclose publicly if they own more than 10% of the shares. Pension funds and mutual funds must publicly disclose their holdings in annual or quarterly financial statements.

And if those shareholders should sell their holdings, could Intact be the target, rather than the initiator, of M&A activity? Gagnon, for one, doesn’t think so. “I don’t see any people having that much cash [to buy Intact], $3.5 billion probably,” he says. “I think our operations are excellent and that prevents us from doing that (selling).”

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“We have excess capital. We don’t have any debt on our balance, so we are on the buyer’s side for sure.”