Definity Financial (DFY) investor relations material

Strategic transformation and acquisition

• Announced $3 billion acquisition of Travelers Canada, elevating market position from sixth to fourth largest P&C insurer in Canada.

• All capital for the acquisition is secured, with debt and equity offerings completed and regulatory approvals progressing as planned.

• Integration is expected to span three years, with business migration beginning mid-2026 and concluding mid-2027.

• $100 million in cost synergies targeted, mainly from technology and operational efficiencies.

• Long-term plan aims to triple company size and increase market share from 5% to over 10% within ten years.

Integration and operational focus

• Retaining business and top talent is the primary focus during integration, with a seamless transition for brokers emphasized.

• Migration of Travelers’ business to the Sachs-Vine system will enhance broker experience and operational agility.

• Broker feedback has been positive, with major partners committed to retention and seeing improved value.

• Integration will be gradual to avoid retention shocks, with pricing and product differences managed over one to two years.

• No significant exits or repricing expected for acquired lines, supporting stable retention.

Financial performance and efficiency

• Combined ratio for Travelers Canada is around 100%, with plans to reduce it to low 90s through cost synergies and loss ratio improvements.

• ROE is targeted to rise from 10% to mid-teens post-acquisition, with organic improvements expected to reach 12–13% without the deal.

• Expense ratio improvements are underway, aiming to reduce operating expenses from 13% to 11% by end of 2026.

• Digital platforms and claims transformation are key levers for ongoing efficiency and margin expansion.

• Sonnet, the digital direct insurance business, has reached break-even and is expected to contribute positively in future years.