ING Canada and Zurich North America Canada said Thursday that they have formed a strategic alliance aimed at integrating their products, services and distribution networks.

Under the terms of the alliance, ING will acquire Zurich’s Canadian personal and group property and casualty insurance operations.

Furthermore, both companies will leverage their expertise in the commercial and corporate lines, with Zurich renewing the large commercial and corporate policies underwritten by both organizations and ING assuming all other commercial risks. Both companies have also agreed to offer their complete product lines to each other’s distributors and customers.

The companies say the alliance gives them a combined 15% share of the Canadian P&C market. It also consolidates ING’s position as a leading insurer in Canada, with a market share of 12%. It gives Zurich a leading position among large commercial and corporate lines, with a market share of 21%. About two-thirds of Canadian brokerages will represent the alliance.

The agreement is subject to the approval of regulatory authorities.

As a result of the alliance, ING will increase its insurance premiums by $460 million, to bring total revenues to approximately $2.8 billion next year. Zurich expects its annual premiums will reach $550 million in 2002.

The acquisition of Zurich’s business is part of ING’s strategy to grow its presence in the in both the insurance and financial services industries. “The strategic alliance and its expanded distribution network will allow us to improve the scale of our activities and offer a more compelling value proposition to insurance brokers,” says Claude Dussault, president and CEO of ING Canada. “It will also allow current ING corporate customers to benefit from Zurich’s strengths in the large risks insurance segment in Canada and the United States.”

According to Barry Gilway, president and CEO of Zurich North America Canada, “We have a leadership position in the large commercial and corporate business, and we play a pivotal role on behalf of international corporate customers operating in Canada. This alliance reinforces our position and commitment to the Canadian marketplace.”

Both companies say they expect customers to benefit from the combined market strength and the wide global reach made possible by the strategic alliance. “We plan to promote the alliance as one market with the joint expertise and capability to deliver the full range of property and casualty products through a large number of insurance brokers,” says Dussault.

Approximately 1,000 Zurich employees will become ING employees once the transaction is completed. The balance of Zurich’s employees will continue to support Zurich’s new platform, which will focus on large commercial, corporate and specialties business. Zurich’s life business will also continue operating as part of Zurich North America Canada.