Brokers brace yourselves: consolidation in Canada is long from being over! In many countries, market leaders hold 20 to 30% of the market. Canada is far from that, leaving insurance companies room to grow.
This was the message delivered by Cees Schrauwers and Philip Twyman, both top directors of CGNU. Mr. Twyman, Group Executive Director, and Mr. Schrauwers, Managing Director, International, were traveling across Canada last September to promote niche commercial insurance (see inset) and as part of their overall management of international business.
CGU’s market share is about 11% in Canada. In the UK and New Zealand, CGNU has almost 20% of the market share. “But look and compare with the other companies,” added Mr. Schrauwers. “National carriers have 30% plus, like AXA, ING, … in their home markets.” The large insurance companies have grown through market consolidation, especially in P&C, explained Mr. Twyman, and this will probably continue.
“Consolidation is coming here slower because of provincial differences,” said Mr. Twyman. “Also there is the geography and there are still many mutuals still operating,” added Mark Webb, President and CEO of CGU Canada. Canada is evolving slowly and still structuring, he continued, “Mergers and acquisitions is an ongoing activity.”
Where will CGU’s acquisitions come from? “From small company acquisitions like we’ve been making in the past,” said Mr. Twyman. “CU and Gan for example.”
“The real challenge though,” said Mr. Schrauwers, “is to be big and small at the same time – to stay close to the market and have the economies of scale at the same time. That requires nifty footwork.”
CGNU’s three main global strategies, explained Mr. Schrauwers, are to get more funds under management, increase life and pensions content because governments around the world cannot support aging population, and to improve the P&C portfolio.