What’s next for Definity following Travelers Canada acquisition

Definity is poised to become a Top 5 property and casualty insurer in Canada, announcing in May a $3.3-billion acquisition of Travelers’ Canadian business.

Definity is developing its plan to integrate the two companies, Definity Financial Corporation president and CEO Rowan Saunders reports during a Fall investors’ conference, when was asked how he’d measure the success of the acquisition.

“The most important measures to look at are retention of the [Travelers Canada] business and retention of the talent,” he told the 26th Annual Scotiabank Financials Summit. “If you can get that right in Year 1, everything starts to flow quite nicely from that.”

Within 48 hours of the deal announcement, Saunders said Definity contacted 1,200 of Travelers’ 1,400 employees in Canada about the details of the transition. Retention programs have been established to keep talent with Definity’s organization. He said, despite the usual uncertainty about any deal, the mood was generally upbeat.

“People are pleased to be joining a Canadian champion,” he said. “This is a Canadian-headquartered business that’s building a leadership position. You’re leaving a Number 12 carrier to become part of the fourth-largest insurance company in Canada.”

Related: How to tell if the Definity-Travelers deal is successful

Definity was ranked seventh in Canada in 2024, with a market share of 4.08%, and total insurance revenue of about $4.25 billion, according to MSA Research data published in Canadian Underwriter’s 2025 Stats Guide. The company writes about $1.5 billion in commercial business.

The deal encompasses about $1.6 billion of Travelers business, including $1 billion in personal lines auto and property business, as well as about $600,000 in commercial business. This includes an even three-way split between small business, mid-market and specialty business, Saunders tells investors.

The deal will beef up Definity’s commercial insurance offering, including new lines of business such as ocean marine and management liability.

The deal is expected to close in 2026 Q1, subject to regulatory approvals. Saunders says the full financial benefits should be realized by 2027.

Saunders said the key to retaining Travelers’ business is to transfer it over to Definity’s broker platform, Vyne, which features direct access into the broker management system.

“The other part of the story is that we have a good platform,” he told investors. “What brokers would be saying to us is that they like Travelers’ capabilities, but they’ll like it more when it’s on the Definity platform, and I think that will help the transition.”

Related: Definity on how its broker platform is performing, how McDougall brokerage deals are modelled

Vyne, and Definity’s direct offering, Sonnet, use Guidewire, a cloud-based digital technology offering real-time data transfer capabilities in claims, policies and billing.

Saunders says Definity’s scale lets it make investments to modify Guidewire technology to produce distinct offerings not available at other insurers.

“Just because you go out and you buy a technology platform like Guidewire, it doesn’t really mean you can compete at the same level as someone like a Definity, because that’s just the foundation of the system. You then still have to put all your foundational layers on top of that,” he said.

“An easy example I could share would be Sonnet’s digital direct business. Whereas many companies have a platform or a policy management system of Guidewire, we built this integration layer, an innovation layer, where in five minutes, you ask five questions, you can get a quote, and you can pay for your product. That isn’t just part of the core deliverable [of Guidewire].”   

Related: Definity says Travelers Canada deal won’t stall brokerage M&A strategy

The Travelers deal is the culmination of the demutualization of Economical in November 2021 — the only Canadian P&C company to demutualize. At the time, turning Economical into a publicly traded, share-based company was intended to generate the capital required to grow the insurer through M&A deals.

Brokers commenting on the deal note it will turn Definity into a larger Canadian-based insurer, providing alternatives to the products offered by the nation’s largest company, Intact. With a market share of 15.44%, Intact wrote more than $16.1 billion total insurance revenue in 2024, per MSA Research data in CU‘s Stats Guide.

Saunders said Definity and Travelers both distribute their products through the broker channel, which makes their offerings complementary. For Saunders, it’s important brokers are onside with the deal.

Related: What brokers think of the Definity-Travelers Canada deal

This article is excerpted from one that appeared in the October-November print edition of Canadian Underwriter.