EGI Financial Holdings (EGI) has reached a definitive agreement with SGI Canada (SGI) to buy its share in the Insurance Company of Prince Edward Island (ICPEI), as part of a strategy to boost its P&C underwriting capabilities in the country.
Under the terms of the agreement, EGI will acquire SGI’s 75% ownership in ICPEI.
Operating through independent brokers in Prince Edward Island, New Brunswick and Nova Scotia, ICPEI is one of the largest property and casualty insurance company in Canada.
Commenting on the acquisition, EGI CEO Steve Dobronyi said, "This is an important acquisition for our company, as it accelerates our strategy of growing our Personal Lines auto insurance business in Canada.
"We are very excited to have the opportunity to join up with the ICPEI team of professionals to grow our insurance operations in the Maritimes."
Furthermore, EGI has signed a perpetual software license agreement to use SGI’s policy management system for all of its business.
ICPEI chief operating officer Jim Revell and president Charlie Cooke commented, "Our businesses and capabilities complement each other nicely and we’re looking forward to building a profitable and successful operation together."
EGI believes that the acquisition will offer various strategic benefits including an added scale of $26m of premiums, deeper expertise in auto insurance, which comprises about 70% of the business and, market synergies with EGI’s Nova Scotia auto business, sold through independent brokers.
In addition to the above, the takeover of certain stake in ICPEI will offer an upgrade of EGI’s policy administration system to a more automated, multi-product, customer-based system.
Pending receipt of the concerned regulatory approvals as well as satisfaction of customary closing conditions, the transaction is likely to conclude in early summer of 2014.