By Chris Munro

March 18 - (The Insurer) - Swiss Re has entered into an agreement to sell its approximately 10.05% holding of Canadian property and casualty insurer Definity Financial Corp’s common shares, with the reinsurer poised to raise around C$655 million ($459 million) from the sale.

Swiss Re Investment Holdings Company Ltd will sell the 11,647,217 common shares that it held in Definity through the divestment.

The common shares will be sold on an underwritten block trade basis at a price of C$56.20 each for aggregate cash proceeds of approximately C$655 million.

Immediately prior to the offering, Swiss Re owned 11,647,217 of Definity’s common shares, equal to some 10.05% of the Waterloo, Ontario-based company’s issued and outstanding common shares.

According to statutory data compiled by S&P Capital IQ, at the end of 2024 Swiss Re was the second-largest holder of Definity’s common shares behind T. Rowe Price Group.

After giving effect to the offering, Swiss Re confirmed it will no longer hold any of Definity’s common shares.

“We are very impressed with the significant progress Definity has made since its IPO in November 2021 and continue to value the ongoing business relationship with the company,” said Andreas Berger, Swiss Re’s group CEO.

“Swiss Re continues to be a strong believer in Definity’s path towards becoming a leading P&C insurer in Canada.

“The sale was done in the context of a regular review and rebalancing of Swiss Re's investment portfolio and is consistent with the group's overall investment strategy across equity and alternative investments,” Berger added.

Swiss Re said the offering has been underwritten by CIBC Capital Markets and National Bank Financial Inc, and is expected to close on March 19 2025.

Last month, Definity reported a full-year 2024 combined ratio of 94.5%, a 1.4 point improvement from 2023, while its underwriting income increased by C$67.5 million year on year to C$212.4 million.

The firm improved its combined ratio and underwriting income despite a record year of catastrophe losses in Canada in 2024. Those losses added 6.4 points to Definity’s 2024 combined ratio, compared with 6.2 points in 2023.

The company, led by president and CEO Rowan Saunders, posted 2024 operating net income of C$310.2 million, compared with C$248.2 million in the prior year.

Definity booked C$4.45 billion of gross premiums written in 2024, up 11.1% year on year.

In late January, AM Best announced it had upgraded the financial strength rating $(FSR)$ on Definity’s insurance arm to A from A-.

At the time, AM Best said the move reflected Definity’s five-year trend of improving profitability and the significant investments it had made in its underwriting capabilities.