Desjardins will buy several of State Farm Canada’s business lines, reports Canadian Insurance Top Broker.
The insurer’s property and casualty and life insurance businesses will go to Desjardins, as well as State Farm’s mutual fund, loan and living benefits companies. They’ll continue to be operated under the State Farm brand for some time after the deal goes through.
The transaction will make Desjardins Group the second-largest property and casualty insurer in Canada, with $3.9 billion in gross premiums.
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The agreement is a win-win scenario for Desjardins and State Farm, Byren Innes, senior strategic advisor at PwC, and a long-time industry consultant, tells Advisor.ca.
The move helps Desjardins expand into Ontario and Western Canada while giving State Farm agents a larger range of products, he explains.
“Great win for Desjardins in picking up what is likely the best multi-line insurance captive distribution network in Canada,” he adds.
The deal is expected to close in January 2015. It also includes a $450 million investment from State Farm into Desjardin’s property and casualty business. Crédit Mutuel will also make a $200 million investment, reports CI Top Broker.
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