On June 6 La Capitale Insurance and Financial Services acquired all aspects of SecuriGlobe, a direct travel insurance company. The two parties have not disclosed any financial details relating to the transaction, but they do say that the firm is the largest independent distributor of travel insurance in Canada.
Having been approached several times by other insurers, this time SecuriGlobe decided to approach a potential purchaser itself. The firm was keen to finance its rapid expansion. As for La Capitale, the CEO of the firm's life insurance division Steven Ross says the company wanted to become a provider of travel insurance but wished to do so on its own terms.
SecuriGlobe deals with more than a dozen vendors and La Capitale will become one of them in time. "We will quietly consider how we can add to SecuriGlobe's line-up in order to make it grow. We are currently developing several products, and we will announce their launch in the coming months," says Ross.
La Capitale was in a good position to accept SecuriGlobe's offer. "Our distribution networks, clients, and mutual policyowners have been asking for a travel insurance product. With the strength of the Canadian dollar against US dollar and the aging population, this niche is seeing attractive growth and will be a big market in the coming years," comments Ross. "In addition, we want to grow the firm significantly, which is what SecuriGlobe was looking for."
SecuriGlobe will also remain totally independent from La Capitale, in the same way as AGA Financial Group was while the insurer owned it between 2005 and 2013. Mathieu Laplante will remain SecuriGlobe’s president and the firm will retain its employees and trademark. "We want to keep the model as it is, and also the employees who have solid expertise in this complex area," says Ross. SecuriGlobe obtains customers through referrals from financial planning firms, investment advisors and brokers, as well as general insurance agents. SecuriGlobe then handles the entire sales process and service.
With support from La Capitale, SecuriGlobe will continue to grow as it sees fit. "Currently, we do 35% of our business outside Quebec," explained Mr Laplante in an interview with FlashFinance.ca, a sister publication of The Insurance and Investment Journal. He attributes the firm’s significant expansion outside of Quebec to the fact it established an office in Mississauga in 2012.
The firm is licensed to do business in all Canadian provinces, but the Ontario market occupies a special place. "It is the biggest market. This is also the one in which growth in the travel insurance market is slightly higher compared what is seen in Quebec," notes Laplante.
La Capitale did not hesitate to buy this new firm after its adventure with AGA ended in October 2013, when three independent shareholders bought out the firm. "The independent financial advisors did not like the fact that AGA belonged to an insurer, even though we demonstrated that AGM's information was partitioned off from ours. This problem does not arise with SecuriGlobe, since it deals directly with its clients," concludes Mr. Ross.