(June 22 – 09:25 ET) – CIBC announced today that it has agreed to sell its property and casualty insurance companies, The Personal Insurance Company of Canada and CIBC General Insurance Company Limited, to Desjardins-Laurentian Financial Corporation, subject to regulatory approval.
The $330 million deal represents about 1.5 times the combined book values of the companies. This transaction is expected to affect CIBC’s fourth quarter earnings.
In a statementment the bank said, “The decision to sell the property and casualty businesses is aligned with CIBC’s strategy to build shareholder value by focusing on and allocating capital to core businesses that offer the best returns on investment.”
The sale rids CIBC of the last of its insurance manufacturing capabilities. The bank will continue to distribute third party creditor and travel medical insurance through its branches and other third party life insurance products as permitted by regulations.
Michel Thérien, DLFC president and CEO, stressed that the acquisition was important to DLFC’s growth. “We are especially pleased that this transaction was successful, since it will allow us to develop our general insurance subsidiary profitably, by giving it the tools it needs to grow its market,” declared Thérien.
The Personal and CIBC General together have more than 400,000 policies in force and a premium base in excess of $300 million.
-IE Staff