Travelers to Divest Canadian Personal Insurance Business and Majority of Canadian Commercial Insurance Operations to Definity for $2.4 Billion

Travelers will maintain its prominent surety business in Canada.

NEW YORK, May 27, 2025—The Travelers Companies, Inc. (NYSE: TRV) has announced a definitive agreement to transfer its personal insurance division and the majority of its commercial insurance operations in Canada to Definity Financial Corporation (TSX: DFY) for an estimated $2.4 billion. This transaction values the sale at approximately 1.8 times book value, after accounting for nearly $0.8 billion in excess local capital that will be repatriated in a tax-efficient manner. Travelers, known as the leading surety provider in North America, will continue to operate its premier surety business in Canada. The completion of this agreement is anticipated in the first quarter of 2026, pending regulatory approvals and other standard closing conditions.

Strategic Transaction and Market Perspective

Alan Schnitzer, the Chairman and CEO of Travelers, remarked, “This transaction underscores our disciplined approach to capital allocation while emphasizing long-term value creation.” He noted that the evolution of the Canadian insurance market over the past decade positions Definity as a suitable long-term steward for this business, a belief supported by the strong value of their offer. Schnitzer expressed confidence that customers, brokers, and employees in Canada would benefit from being part of a leading, fully integrated property and casualty insurer.

Financial Implications and Future Plans

Travelers expects to deploy approximately $0.7 billion of the net proceeds from this transaction to buy back shares in 2026, while the remainder will be held to support ongoing business activities and general corporate needs. The share repurchases following this agreement are projected to yield a small increase in the company’s earnings per share over the next several years.

Advisory Support and Legal Guidance

Financial advisory services for Travelers in this transaction were provided by Jefferies LLC, while legal representation was handled by Skadden, Arps, Slate, Meagher & Flom LLP and Stikeman Elliott LLP.

Understanding the Book Value Multiple

Calculation of Book Value Multiple

The calculation of the price-to-book value multiple excludes approximately $0.8 billion in excess local capital from both the purchase price and the book value calculation. Book value, in this context, is derived from the equity of the entities being sold as of December 31, 2024, and is adjusted for the division of the surety business under IFRS standards.

About Travelers Companies

The Travelers Companies, Inc. (NYSE: TRV) is a prominent provider of property casualty insurance, covering a wide range of needs in auto, home, and business sectors. As a component of the Dow Jones Industrial Average, Travelers employs over 30,000 people and reported revenues exceeding $46 billion in 2024. Detailed company information can be found online.

Forward-Looking Statements and Future Outlook

This announcement contains forward-looking statements as outlined by the Private Securities Litigation Reform Act of 1995, excluding statements of historical facts. These statements pertain to anticipated transaction closure, projected usage of proceeds, and financial effects resulting from the sale and subsequent share repurchases. Actual results may differ significantly due to various risks and uncertainties that are detailed in the company’s most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. Moreover, the successful execution of the transaction is subject to satisfactory closing conditions, including necessary regulatory approvals, and may not take place as planned. The forward-looking statements mentioned here are valid only as of the date of this announcement, and there is no obligation to update them in the future.

Concluding Insights

In summary, the sale of the personal and most commercial insurance segments of Travelers Canada marks a significant shift for the company, positioning it for increased focus on its core surety business. As the company navigates through change, it emphasizes the importance of judicious capital management and strategic growth in the evolving insurance landscape. This transaction illustrates a commitment not just to shareholders but also to enhancing customer service in a rapidly changing market environment.