(Image source: Definity website.)

The Travelers Companies, Inc. (New York) has signed a definitive agreement to sell the personal insurance business and the majority of the commercial insurance business of Travelers Canada to Definity Financial Corporation for approximately US$2.4 billion.

Alan Schnitzer, Chairman and CEO, Travelers.

Travelers will retain its Canadian surety operations, which remain part of its North American surety business. The transaction is expected to close in the first quarter of 2026, subject to regulatory approvals and customary closing conditions.

The purchase price represents a multiple of 1.8 times book value, excluding approximately US$800 million of excess local capital being repatriated as part of the transaction. Book value is calculated on an IFRS basis as of Dec. 31, 2024, adjusted for the separation of the surety business.

“This transaction is a reflection of our steadfast commitment to disciplined capital allocation and long-term value creation,” says Alan Schnitzer, chairman and CEO, Travelers. “The evolution of the Canadian market over the past decade has made Definity a natural long-term owner for this business, a view affirmed by the compelling value of their proposal. I am confident that our Canadian customers, brokers and colleagues will benefit from being part of one of the country’s leading and fully integrated property casualty insurers.”

Additional Share Repurchases

Travelers plans to use approximately US$700 million of the net proceeds for additional share repurchases in 2026, with the remainder retained to support operations and general corporate purposes. The company expects the transaction and associated repurchases to be slightly accretive to earnings per share over the next several years.

Jefferies LLC is serving as financial advisor to Travelers. Legal counsel is provided by Skadden, Arps, Slate, Meagher & Flom LLP and Stikeman Elliott LLP.

Travelers’ Sardinha Presents Scalable Model for Embedded Innovation