Alberta brokerage Drayden Insurance has announced the acquisition of Darson Insurance Services in Stony Plain, Alta.
Drayden Insurance is a division of Ontario brokerage McDougall Insurance, which itself is a subsidiary of Definity Financial Corporation. In October 2022, Definity increased its ownership interest in McDougall from 25% to 75%, and owned approximately 78% of the brokerage as of October 2023.
In a press release Wednesday, Drayden Insurance president Catherine Cake called the brokerage’s acquisition of Darson “a perfect fit.”
“The strategic move represents a step forward in Drayden and McDougall’s mission to enhance its service offerings and expand its presence in the Alberta market,” she said.
“The integration process will be conducted with meticulous attention to detail to ensure a smooth and positive experience for all stakeholders,” the release added.
Darson Insurance Services is a full-service, independent insurance brokerage offering insurance to individuals and businesses in Stony Plain, Spruce Grove, Edmonton and all surrounding areas. According to its website, the brokerage offers personal home and property (including condo, tenants, seasonal homes and rental properties), recreational vehicle, commercial (including auto, CGL and commercial specialty) and personal auto insurance.
Personal auto in Alberta was in the headlines recently, when the provincial United Conservative Party (UCP) said in November 2023 it was committed to retaining auto rate caps for “good drivers” into 2024. The national industry association, IBC, said that would amount to keeping the auto rate cap on 80% of Alberta’s drivers.
The UCP said Albertans with good driving records will only see their rates increase as necessary to take into account Alberta’s inflation, per the province’s September 2023 inflation rate of 3.7%. UCP defines a good driver as anyone except those who have:
- Any at-fault incidents in the last six years,
- Any Criminal Code traffic convictions in the last four years,
- Any major traffic convictions in the last three years, or
- More than one minor traffic conviction in the last three years.
UCP first announced the universal auto insurance rate cap in January 2023.
Definity said in its 2023 Q1 earnings call that the company’s auto book is “not rate adequate” in Alberta, and at the time expressed concern over the province’s rate pause.
Definity president and CEO Rowan Saunders said its direct writer Sonnet’s auto book of business in Alberta—at about $80 million—represents only 2% of Definity’s total portfolio, so the rate pause doesn’t have a significant impact on the company’s overall bottom line.
However, if the pause becomes a long-term, post-election solution, “we’re very committed to not deploying capital into a line of business where there is a rate freeze and we’re not rate adequate,” Saunders said at the time.
Nevertheless, Definity’s companies Economical and Sonnet continue to operate in the Alberta auto insurance market, Paul MacDonald, executive vice president, personal insurance & digital channels, Definity told CU in July, after a notable insurer pulled out of the market.
The previous Alberta NDP government first introduced a rate cap of 5% in 2017. It remained in place until the UCP came into power in 2019.
George Hodgson, former CEO of the Insurance Brokers Association of Alberta, told Canadian Underwriter in its print edition this fall that, between about 2004 to 2009, “Alberta was considered the gold standard for auto insurance because it was stable and affordable.”
After that, claims pressures started to emerge from regulation, vehicle repair costs and distracted driving. And then after the 5% rate cap was lifted in 2019, “there had been two, three, or four years of pent-up premium increases,” Hodgson said.
Feature image by iStock.com/cagkansayin
