By fall, there could be changes coming to Canada’s motorcycle insurance scene, with an announcement last week of Jevco’s possible sale.
Jevco is Canada’s largest writer of motorcycle insurance. Currently, they’re owned by by financial holding company the Westaim Corporation, but by the looks of it, they’ll be purchased by financial holding company the Intact Financial Corporation.
According to Yahoo and the Globe and Mail, the two companies have agreed to the sale, but Intact has to pass the idea by shareholders. The deal already seems like it has enough backing there, though, so in a few months, it appears it will go through.
This might not sound like a big deal, but consider this; when Westaim bought Jevco, they paid $261.4 million to Kingsway Financial Services in 2010. Now. Intact is supposedly willing to pay $530 million for the insurance company. The numbers don’t add up, unless you figure that either the motorcycle insurance business is a lot more lucrative than they’re letting on (and right now, they’re saying a long riding season meant losses last year), or Intact figures they can recoup the high price by jacking up insurance rates.
Or, to put it this way: Either we’re paying too much now, or we’re going to be paying too much in the near future.