Definity is sixth largest P&C company in Canada, with over 3,200 employees and direct premiums written of $4.4 billion in 2024. It distributes its products through 600 independent brokers, making it the fourth largest company in this channel. CEO Rowan Saunders launched Sonnet, the first digital P&C brand, in 2019. It now accounts for 14% of DFY’s premiums. Definity also owns Petline, the largest provider of pet insurance in Canada, a fast-growing field.
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Having traded sideways for most of the first two years since the IPO, Definity’s share price has almost doubled since 2023. It peaked just below $80 in June ahead of a $385 million issue of new equity to help pay for its $3.3 billion takeover of Travelers Insurance Canadian property and casualty business this year. Definity is up 20% in the last year.
With the transformative acquisition of Travelers’ Canadian P&C business due to close next year, Definity will have added $1.6 billion to its gross premiums, giving it the ability to spread its costs over a much bigger base. Its Sonnet digital insurance offering and Petline insurance give it opportunities for sustained growth. Trading at 17 times 2024 earnings and with a low but sustainable and growing dividend, Definity remains a Buy. - Gavin Graham
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DFY was first recommended here on November 8, 2022