Company Expands Specialized Insurance Product Lines into Canada in Response to Rising Demand
Canada’s independent insurance complaint resolution service appoints new
Regional Head of Communications and Marketing for Western Canada
Most people have health insurance coverage during their working years, but their employer picks up at least some of the cost. For retirees, the economics of buying similar coverage may not add up. Here’s why.
Strategic thinker with extensive industry experience will work with clients to improve employee health and well-being
Climate change means emergency responders need specialized, updated training according to wildfire expert
The excerpted article was written by Anne Gaviola | Vice.com
According to the Canadian Interagency Forest Fire Centre (CIFFC), eight specialists left for Victoria Monday night and another 21 arrived in New South Wales—the area hardest-hit—this weekend. Each round of deployments ranges from 31 to 38 days. A total of 95 Canadians are scheduled to help crews in Australia’s Rural Fire Service, which are mostly volunteers who have been stretched by bush fires fuelled by the country’s longest and driest year ever recorded.
Alberta Agriculture and Forestry spokesperson Adrienne South said in an email, “This is the first time a multi-province Canadian crew is going to Australia.”
Even though Canada hasn’t dealt with bushfires as deadly as Australia’s, Canadian wildfire experts say our experience is valuable for fighting the fires now, and also for dealing with the aftermath.
Twenty-five people have been killed as well as an estimated 480 million animals. Millions of acres have been destroyed in fires that have been raging since September and their summer has only just begun. The Insurance Council of Australia estimated that insurance claims have already reached $485 million.
According to wildfire researcher Mike Flannigan, the types of blazes they’ll be dealing with are similar to very large, high-intensity fires that Canadians have seen recently, and more frequently, in British Columbia and Alberta. “These are erratic, hard to predict and dangerous. It has climate change fingerprints all over it,” said Flannigan.
The 2016 blaze in Fort McMurray, Alberta, brought an estimated $9 billion in damages and was the costliest disaster in Canadian history. The historic wildfire seasons of 2017 and 2018 in British Columbia also saw large-scale devastation, which Australian crews helped battle. The two countries have a history of helping each other out and it helps that we have opposite seasons, though fire seasons in both countries have gotten longer in recent years.
The specialists from Canada won’t be frontline firefighters—Australia hasn’t asked us to send those, at least not yet. We’ve sent managers and people behind the scenes in charge of logistics, strategy, and tracking equipment and planes. There’s a lot more to fire response than putting out blazes and Canadian expertise can play an important role in dealing with the humans and the trauma that comes with this kind of extreme destruction.
The biggest insurance brokerage in Canada has been on a dealmaking blitz that may only be about halfway done, according to the company’s Ontario chairman.
Chicago-based Hub International Ltd. sells insurance, but it has also spent the past year expanding the Canadian side of its business, which advises companies on their employee benefits, such as health or retirement plans. It has been doing so in part by acquiring a number of boutique firms.
On Tuesday, Hub said it acquired for an undisclosed sum Toronto’s PDF Financial Group Inc., an independent brokerage that helps a company’s human-resources department manage employee programs. The acquisition was one of five such deals Hub has announced to date in October, involving three companies in Canada and two in the United States.
Hub is Canada’s biggest property and casualty insurance broker by a “healthy margin,” but it had heard back from some clients wanting advice about benefits and pensions as well, according to Gregory Belton, the executive chairman of Hub Ontario.
“We’re not only getting larger and filling out a geographic footprint, but we’re developing services for what we think is the under-served middle market of Canadian business,” Belton said in an interview with the Financial Post.
After announcing its Canadian benefit strategy in July 2018, Hub noted at the beginning of this year that it had already acquired 13 Canadian employee-benefit and pension brokerages since 2018, increased fee revenue to more than $50 million and opened seven new offices. Hub wants to earn more than $100 million in commission fees by 2021, and said it expected to open an additional 10 offices.
“I would say that we’re about halfway done in our acquisition strategy,” Belton said. “We have a fairly robust pipeline across the country, and you’ll see further acquisitions being closed in the coming months.”
Mike Berris, a partner at accounting firm Smythe LLP who specializes in valuations and M&A consulting in the Canadian P&C insurance industry, said he expects more activity in the benefits space — although not all brokers may be able to pull it off.
Even though it’s a risk-based product, you really have to have scale and expertise to do it properly.
“There’s a lot of desire, but there’s only so many people who are capable of doing that,” Berris said. “Even though it’s a risk-based product, you really have to have scale and expertise to do it properly.”
Hub has been scaling up since it formed in 1998 with the merger of 11 Canadian brokerages. It went public soon after, expanded into the U.S. and in 2007 was bought by private-equity firm Apax Partners and investment bank Morgan Stanley.
In 2013 Hub announced it was being acquired by funds advised by another private-equity firm, Hellman & Friedman LLC, in a deal that valued the brokerage at around US$4.4 billion.
Hub then said in October 2018 that it had agreed to a deal involving “a substantial minority investment” from funds managed by Toronto-based investment firm Altas Partners. The agreement implied a total enterprise value for Hub of more than $10 billion.
Since the deal, Hub’s website shows it has made more than 50 acquisition-related announcements. Currently, the brokerage has more than 11,000 employees, with more than 250 offices in the U.S. and about 200 in Canada, a spokesperson said.
“Like a lot of private-equity-owned brokerages, they have been very, very aggressive and they’re very, very effective in growing through acquisitions,” Berris said.
Belton said most Canadian businesses fit the mid-market mold, but that there is no “dominant player” in that section of the market right now for the sort of benefits business Hub is expanding. Even so, he said there has been “very robust competition” for the types of companies Hub is buying.
“Our aspiration is to become the dominant player, just as we are in the property-casualty side of the business,” Belton said.