TORONTO, June 11, 2021 /CNW/ - Intact Financial
Corporation (TSX: IFC) ("Intact" or the "Company") announced today
that Scandi JV Co 2 A/S, which is co-owned by Intact and Tryg A/S
(CPH: TRYG) ("Tryg") following the acquisition of RSA Insurance
Group plc ("RSA"), has entered into a definitive agreement to sell
(the "Sale") Codan Forsikring A/S's Danish business ("Codan DK") to
Alm. Brand A/S Group ("Alm. Brand") (CPH: ALMB).
Under the terms of the agreement, Alm. Brand will acquire Codan
DK for a total cash consideration of approximately DKK 12.6 billion (approximately $2.52 billion).
Intact will receive 50% of the proceeds, being approximately
DKK 6.3 billion (approximately
$1.26 billion), from the Sale,
pursuant to the agreement with Tryg. Intact intends to use its
proceeds from the Sale to repay short-term debt raised by it to
acquire RSA and for general corporate purposes.
The Sale is currently anticipated to close during the first half
of 2022, subject to receipt of the relevant approvals or clearances
from regulatory and antitrust authorities, the completion of Alm.
Brand's financing, and the satisfaction or waiver of certain other
conditions.
"We are pleased to announce the sale of Codan DK to Alm. Brand,
a well-known and respected Danish financial services company. The
combined business is very well positioned in the Danish non-life
insurance market," said Charles
Brindamour, Chief Executive Officer, Intact Financial
Corporation.
The Sale is expected to have a positive impact on Intact's
anticipated internal rate of return ("IRR") of over 15% for its RSA
acquisition. The Company expects the Sale to have an immaterial
impact on the previously disclosed net operating income per share
("NOIPS") accretion expectations for its RSA acquisition, which
remains high-single digit in first 12 months following the RSA
acquisition, increasing to upper-teens within 36 months.
Alm. Brand is a Danish financial services group focused in
Denmark and carries on non-life
insurance and life insurance activities. Non-life insurance is the
group's core business, exclusively targeting the Danish market,
with a special focus on private customers, small and medium-sized
enterprises, property owners and administrators, agricultural
customers and the public sector.
Codan DK is one of the largest non-life insurers in Denmark, distributing a broad range of
insurance products across multiple channels, utilising a leading
brand that has been built over the last one hundred years.
Barclays Bank PLC, acting through its Investment Bank, and
Danske Bank A/S are acting as financial advisers, and Clifford
Chance LLP is acting as English law legal adviser and Gorrissen
Federspiel Advokatpartnerselskab is acting as Danish law legal
adviser to Intact and Scandi JV Co 2 A/S.
About Intact Financial Corporation
Intact Financial Corporation (TSX: IFC) is the largest provider
of property and casualty (P&C) insurance in Canada, a leading provider of global specialty
insurance, and, with RSA, a leader in the U.K. and Ireland. Our business has grown organically
and through acquisitions to over $20
billion of total annual premiums.
In Canada, Intact distributes
insurance under the Intact Insurance brand through a wide network
of brokers, including its wholly-owned subsidiary BrokerLink, and
directly to consumers through belairdirect. Intact also provides
affinity insurance solutions through the Johnson Affinity
Groups.
In the U.S., Intact Insurance Specialty Solutions provides a
range of specialty insurance products and services through
independent agencies, regional and national brokers, and
wholesalers and managing general agencies.
Outside of North America, the
Company provides personal, commercial and specialty insurance
solutions across the U.K., Ireland, Europe and the Middle East through the RSA brands.
About Tryg A/S
Tryg is one of the largest insurance companies in the Nordic
region with activities in Denmark,
Norway and Sweden. Tryg had total premiums of
DKK 22.7 billion (approx.
EUR 3 billion) at year end 2020 and
is active in the Private, Commercial and Corporate segment across
the Nordic region. Tryg provides peace of mind and value for more
than 4 million customers on a daily basis. Tryg A/S is listed on
NASDAQ Copenhagen and approximately 45% of the shares are held by
TryghedsGruppen smba. TryghedsGruppen, annually, contributes around
DKK 650m to peace of mind purposes
via TrygFonden.
About Alm. Brand A/S Group
Alm. Brand is headquartered in Copenhagen and has approximately 1,400
employees. The company was established in 1792 and is the
third-largest non-life insurance company in Denmark with a market share of approximately
9%. Non-life insurance assists around 320,000 households and 90,000
corporate customers. Life insurance assists around 70,000
customers.
Forward-looking statements
Certain of the statements included in this press release about
the Sale, including the anticipated use of proceeds, timing of
closing, impact and benefits thereof or any other future events or
developments constitute forward-looking statements. The words
"may", "will", "would", "should", "could", "expects", "plans",
"intends", "trends", "indications", "anticipates", "believes",
"estimates", "predicts", "likely", "potential" or the negative or
other variations of these words or other similar or comparable
words or phrases, are intended to identify forward-looking
statements. Unless otherwise indicated, all forward-looking
statements in this press release are made as of June 11, 2021 and are subject to change after
that date.
Forward-looking statements are based on estimates and
assumptions made by management based on management's experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors that management
believes are appropriate in the circumstances. In addition to other
estimates and assumptions which may be identified herein, estimates
and assumptions have been made regarding, among other things, the
receipt of all requisite approvals or clearances in a timely manner
and on terms acceptable to the Company, the realization of the
expected strategic, financial and other benefits of the Sale, and
economic and political environments and industry conditions.
However, the completion of the Sale is subject to customary closing
conditions, termination rights and other risks and uncertainties,
including, without limitation, regulatory approvals or clearances,
and there can be no assurance that the Sale will be completed in a
timely manner, or at all. There can also be no assurance that the
strategic and financial benefits expected to result from the Sale
will be realized. Many factors could cause the Company's
actual results, financial performance or condition, or achievements
to differ materially from those expressed or implied by the
forward-looking statements herein, including, without limitation,
the following factors:
- expected regulatory processes and outcomes in connection with
the Sale and the Company's business;
- the Company's ability to implement its strategy or operate its
business as management currently expects;
- the Company's ability to accurately assess the risks associated
with the insurance policies it writes;
- unfavourable capital market developments or other factors,
including the impact of the COVID-19 pandemic and related economic
conditions, which may affect the Company's investments, floating
rate securities and funding obligations under its pension
plans;
- the cyclical nature of the P&C insurance industry;
- management's ability to accurately predict future claims
frequency and severity, including in the high net worth and
personal auto lines of business;
- government regulations designed to protect policyholders and
creditors rather than investors;
- litigation and regulatory actions, including with respect to
the COVID-19 pandemic;
- periodic negative publicity regarding the insurance
industry;
- intense competition;
- the Company's reliance on brokers and third parties to sell its
products to clients and provide services to the Company and the
impact of COVID-19 and related economic conditions on such brokers
and third parties;
- the Company's ability to successfully pursue its acquisition
strategy;
- the Company's ability to execute its business strategy;
- management's estimates and expectations in relation to future
economic and business conditions and other factors in relation to
the Sale and resulting impact on growth and accretion in various
financial metrics;
- unfavourable capital markets developments or other factors that
may adversely affect Alm.Brand's ability to finance the Sale;
- the Company's dependence on key employees;
- the Company's ability to achieve synergies arising from
successful integration plans relating to acquisitions;
- the Company's profitability and ability to improve its combined
ratio in Canada and
internationally;
- the Company's participation in the Facility Association (a
mandatory pooling arrangement among all industry participants) and
similar mandated risk-sharing pools;
- terrorist attacks and ensuing events;
- the occurrence and frequency of catastrophe events, including a
major earthquake;
- catastrophe losses caused by severe weather and other
weather-related losses, as well as the impact of climate
change;
- the occurrence of and response to public health crises
including epidemics, pandemics or outbreaks of new infectious
diseases, including most recently, the coronavirus (COVID-19)
pandemic and ensuing events;
- the Company's ability to maintain its financial strength and
issuer credit ratings;
- the Company's access to debt and equity financing;
- the Company's ability to compete for large commercial
business;
- the Company's ability to alleviate risk through
reinsurance;
- the Company's ability to successfully manage credit risk
(including credit risk related to the financial health of
reinsurers);
- the Company's ability to contain fraud and/or abuse;
- the Company's reliance on information technology and
telecommunications systems and potential failure of or disruption
to those systems, including in the context of the impact on the
ability of our workforce to perform necessary business functions
remotely, as well as in the context of evolving cybersecurity
risk;
- the impact of developments in technology and use of data on the
Company's products and distribution;
- changes in laws or regulations, including those adopted in
response to COVID-19 that would, for example, require insurers to
cover business interruption claims irrespective of terms after
policies have been issued, and could result in an unexpected
increase in the number of claims and have a material adverse impact
on the Company's results;
- COVID-19 related coverage issues and claims, including certain
class actions and related defence costs could negatively impact our
claims reserves;
- general economic, financial and political conditions;
- the Company's dependence on the results of operations of its
subsidiaries and the ability of the Company's subsidiaries to pay
dividends;
- the volatility of the stock market and other factors affecting
the trading prices of the Company's securities, including in the
context of the COVID-19 pandemic;
- the Company's ability to hedge exposures to fluctuations in
foreign exchange rates;
- future sales of a substantial number of the Company's common
shares; and
- changes in applicable tax laws, tax treaties or tax regulations
or the interpretation or enforcement thereof.
All of the forward-looking statements included in this press
release are qualified by these cautionary statements and those made
in the section entitled Risk Management (Sections 28-33) of our
MD&A for the year ended December 31,
2020 ("Annual MD&A"), the section entitled Risk
Management (section 19) of our MD&A for the quarter ended
March 31, 2021 ("Q1 MD&A") and
elsewhere in this press release. These factors are not intended to
represent a complete list of the factors that could affect the
Company. These factors should, however, be considered carefully.
Although the forward-looking statements are based upon what
management believes to be reasonable assumptions, the Company
cannot assure investors that actual results will be consistent with
these forward-looking statements. Investors should not rely on
forward-looking statements to make decisions, and investors should
ensure the preceding information is carefully considered when
reviewing forward-looking statements contained herein. The Company
and management have no intention and undertake no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Non-IFRS Measures
The Company uses both International Financial Reporting
Standards ("IFRS") and certain non-IFRS measures to assess
performance. Non-IFRS measures do not have any standardized meaning
prescribed by IFRS and are unlikely to be comparable to any similar
measures presented by other companies. Management analyzes
performance based on certain non-IFRS financial measures, including
IRR and NOIPS. See Section 36 of the
Annual MD&A and Section 21 of the Q1 MD&A, each of which is
posted under the Company's profile on SEDAR at www.sedar.com, for
the definition and historical reconciliation to the most comparable
IFRS measure, where such a measure exists.
SOURCE Intact Financial Corporation