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The acquisition of State Farm has made it one of Western Financial less relevant for Desjardins

by

Hubert Roy

24 August 2017 07:00

Denis Dubois | Photo : Denis Méthot

Denis Dubois said that Desjardins Insurance derives great profits from the relationship it has established with State Farm. He promises that this relationship will integrate disruptive elements in the canadian market.

The chief executive also noted that Desjardins group has a relationship of 25 years with the insurer Crédit Mutuel, established in France, and is a shareholder in the amount of 10 % of Desjardins general insurance Group (DGIG). «We are in interaction with them. It is an element hyperfondamental. Desjardins is not a player within the global insurance, but we have access to them. «

Thanks to its links with State Farm, Desjardins has been able to become a member of the’International Impact Factor Services (IIFS), the umbrella body for the implementation of autonomous cars in the United States. Desjardins was the first insurer member in Canada. Others have followed thereafter.

«It allows us to have access to the major players, particularly in Silicon Valley. Without the help of State Farm, it would have been difficult to access. «

The acquisition of State Farm, however, has had an impact on another transaction made earlier, that of Western Financial. After you have acquired the network of agents of State Farm in Canada, a question is imposed at Desjardins. Was it still necessary to have a network of brokers in Western Financial, which was another mode of distribution that is not represented elsewhere within the company ?

«When we did the transaction, she had plenty of sense, given our ambitions outside of Quebec. There was no integration to be done, since it was a network. Then State Farm came. He had to see if we wanted to keep all of these networks. Brokerage presents an approach very different from the direct distribution. And we knew that we should make significant investments in technology. We came to the conclusion that we must keep our focus. Keep Western Financial would have presented a risk that it scatters. We did not make a mistake. We have no regrets in regards to the episode Western Financial. «This last one has been sold to a subsidiary of Wawanesa.

And when he speaks of the acquisition of State Farm, Mr. Dubois noted a number of benefits. The most important thing that it identifies, however, is the size. Having access to a network that distributes more than one product is another, which is our sister company, life insurance Desjardins financial Security benefits. Then comes the ability to achieve strategic partnerships.

«In compensation, we can achieve agreements, winning, in addition to a better ability to cope with disasters. If we ever saw a Fort McMurray in Quebec, we will be able to mobilize our 2,600 employees in compensation, » he said.

Another advantage is indirect : the acquisition has given the brand awareness Desjardins outside Quebec. «Since the announcement of the transaction, our people recruitment in Toronto were receiving ten times more resumes than usual. «

In the end, the integration of the activities of State Farm has been a five-year process. «It was challenging and demanding, given the level of complexity is important, considering that we had to organize our systems to us systems. He had to do it thread by thread. The cultural program has presented these challenges to our people. It requires efforts. «

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