Guarantee offers speciality lines insurance in the US and Canada, while Frank Cowan is an Ontario-based managing general agent

IntactFinancial

Canadian insurance giant Intact Financial to buy Guarantee and Frank Cowan (Credit: Open Grid Scheduler / Grid Engine / Wikipedia.org)

Intact Financial, a Canadian property and casualty major, has agreed to acquire The Guarantee Company of North America and Princeton-based Frank Cowan in an all-cash deal worth about 1bn Canadian dollars  (£620m).

Guarantee is a speciality lines insurer with operations in Canada and the US, while Frank Cowan is a managing general agent (MGA) focused on speciality insurance.

Intact expects the acquisition to strengthen its position in Canada besides adding new products targeting the high net worth customer segment. It is also said to meaningfully advance the North American speciality lines platform of the company, consolidating its positions in public entity and surety.

The deal excludes Princeton’s Cowan Insurance Group, Fountain Street Finance, and Cowan Asset Management.

Princeton board chairman Maureen Cowan said: “After careful consideration, we believe that combining our strong customer focus and the expertise of our employees in speciality lines and surety, with Intact’s resources, in particular its advanced analytics capabilities, provides tremendous opportunities for the combined entities to leverage one another’s strengths to build an outstanding, Canadian owned, North American specialty insurer.”

Insurance solutions offered by Guarantee

Based in Toronto, Guarantee has been offering insurance solutions since 1872. Two-thirds of its business is speciality lines and surety, while the remaining is personal lines, which includes a high net worth home and auto insurance portfolio in Canada.

The company’s speciality insurance product lines in Canada include personal insurance, corporate insurance, surety, transportation, and trade credit. In the US, Guarantee specialises in a range of surety solutions such as contract surety, commercial surety, environmental surety, and cross border surety bonds.

Intact said Guarantee will bring more than C$560m (£347.95m) in gross premiums written, which includes more than C$100m (£62.13m) in the US. As a result, Intact will be growing its annual North American speciality lines direct premiums written to nearly C$3bn (£1.86bn).

Operations of Frank Cowan

Headquartered in Princeton, Ontario, Frank Cowan offers specialised insurance programmes to public entities in Canada. The MGA caters to municipalities, healthcare, education, community, children’s and social service organisations with coverage placement, claims services, and risk management consultation.

Frank Cowan places business with Guarantee and other insurers.

Intact CEO Charles Brindamour said: “The acquisition of The Guarantee Company of North America and Frank Cowan Company is strongly aligned with our strategic and financial objectives.

“We are delivering on our objectives to grow in Canada and build a leading North American specialty platform. I’m enthusiastic about what we will accomplish by leveraging the combined expertise of our teams and our expanded offering.”

The deal, which is subject to regulatory approvals, is anticipated to be completed in the fourth quarter of 2019.