Definity’s plans to integrate Travelers Canada operations

Definity’s merger with Travelers Canada is officially closed, and work now turns to integrating the operations, Definity president and CEO Rowan Sauders told a Feb. 19 fireside chat with RBC Capital Markets.

“It is a very complimentary portfolio. We’re getting about a billion dollars of personal insurance business. Scale is really important in that business line,” he adds. “We get significant commercial products and capabilities and talent as well. And, of course, [we’re] happy with that specialty business.”

Going forward, he says a key objective during integration is to “retain the business, retain the people, and continue to grow the Definity core existing portfolio. Those are really the three big priorities,” says Saunders.

Naturally, a $1.5-billion acquisition will produce some attrition, he notes, “but by and large, we don’t expect big blocks of business to leave.”

One key retention strategy revolves around the commercial specialty business and the specialty claims teams. Saunders says such talent can be hard to source and produces value. “There’s [intellectual property], there’s product, there’s trading relationships. That’s important,” he says on the call.

Growth opportunities

Definity’s had an eye on growth in the commercial specialty space for several years, but Sauders notes the Travelers Canada acquisition represents a leap ahead on those plans. “It’s an acceleration of those capabilities,” he says.

The acquisition also brings in new commercial specialty segments.

“We may have been in some segments of directors and officers insurance, but now we’ve got a bigger appetite – more of that segment or vertical we can participate in,” Sauders tells the call.  

“But financial lines is new for us. Ocean marine is new for us. Some parts of oil and gas technology…cyber insurance. All of these are open in the market from what we have.”

Related: Why size matters in Canada’s soft commercial market

That creates opportunities for Definity to cross-sell lines they didn’t previously have to existing customers, and to build out those existing relationships. A second advantage is “adding product density, to our offerings, to the brokers,” says Saunders. “This just makes us more of a go-to commercial insurance partner for our top brokers…we write larger share of their wallet.”

Active marketing is likely to get underway in the second half of this year and into 2027.

Prior to the merger, Definity’s commercial presence was strongest in the small- to medium-sized enterprise space, Saunders notes. Overall, the company’s mix is around 70% personal lines, against 30% commercial. That’s similar to Travelers Canada’s segment balance pre-acquisition.

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Integrating Travelers Canada

Merging the two companies’ business activities is expected to ramp up in the middle of this year. Work has already started, “but for the actual heavy lifting of transferring the [Travelers] business off the legacy systems [and] onto the Definity Vine platform [that] starts middle of the year,” Saunders says.  

“You can really think about this as middle of ’26 rolling into middle of ’27 for the vast majority of the portfolios. There’ll be a little bit that goes past that.”

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Once the conversion is finished, “we think both portfolios – the Travelers legacy portfolio and the Definity core portfolio – will start to operate similar type growth patterns [as] in the past.”

Expected cost savings post-merger were communicated during the firm’s Feb. 13 earnings call. “What we said is there’s about $100 million-plus of cost synergies that we expect to extract over the course of the full integration. So that’s over a three-year period.”

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.