Desjardins plans to expand beyond Quebec

Insurance co-op is looking to give Canada’s largest financial companies a run for their money

Desjardins plans to expand beyond Quebec

Insurance News

By Lyle Adriano

Desjardins Group recently revealed that it is looking to acquire more financial companies as part of its strategy to expand beyond Quebec.

CEO Guy Cormier said that the company would consider deals up to $3 billion over the next three to five years. He also said that he is interested in pursuing partnerships with other credit unions and co-ops.

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“We’re open for business, open to increase our revenues and focus on these three targets,” Cormier told Bloomberg. “We’ll be really open to any kind of transaction and acquisition, especially in property and casualty insurance.”

Under former CEO Monique Leroux, Desjardins was set on the road to expansion with the 2011 $443 million purchase of Western Financial Group. In 2013, the firm purchased 40% of online brokerage Qtrade Financial Group. Desjardins later acquired State Farm Mutual Automobile Insurance Co.’s Canadian property and casualty and life insurance operations in 2013, along with the latter’s mutual fund, loan and living benefit companies.

Cormier succeeded Leroux last year, and said that his first two years in his four-year term will be about “taking a deep breath” on takeovers, opting instead for an integration strategy. Under him, Desjardins ceded Western Financial’s pet insurance business to Economical Mutual in January. The following month, the firm agreed to a $775 million deal to sell its insurance brokerage network to Wawanesa Mutual Insurance.

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“Desjardins is still really involved, really focused and really interested in doing business outside Quebec,” Cormier stated. “We feel we have the technology, the knowledge, the capital, the money and we’re ready for that."

Cormier told Bloomberg that Desjardins will soon move to take full ownership of the Qtrade platform while finding more wealth-management deals and adding more products to its line.

“We want to be more aggressive and have a stronger presence outside Quebec on wealth management,” he explained.

He also has plans to expand the firm’s credit card, debit and mobile technology, as well as its presence in the commercial loans, consumer lending and wealth management markets.

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