Definity Financial Q2 Profit Exceeds Expectations, Raises $385 Million in Private Placement

Definity Financial reported Q2 adjusted profit that beat estimates. The company also raised $385 million in a private placement of shares. Definity Financial Corporation has agreed to acquire Travelers Cos.' Canadian operations for $2.4 billion and has raised $351 million in a private placement of common shares. The acquisition is expected to close in the second half of 2025.

TORONTO, July 2, 2025 – Definity Financial Corporation (TSX: DFY) reported its second-quarter 2025 results, showing strong performance despite a challenging environment. The company's gross written premiums (GWP) grew by 9.1% in Q2 2025, excluding the premiums of its exited line from both periods. This growth was driven by solid underlying personal auto rate and unit count growth, as well as continued firm market conditions in personal property and strong execution in commercial insurance [1].

The company's combined ratio of 92.9% in Q2 2025 reflects a disciplined performance across both commercial and personal lines, driven by improvements in Sonnet profitability, continued expense efficiencies, and a lower-than-expected level of catastrophe losses. Operating net income for the quarter was $98.9 million, down from $109.1 million in Q2 2024, resulting in operating earnings per share (EPS) of $0.84. The year-to-date operating return on equity (ROE) was 9.6% [1].

Definity Financial also announced the acquisition of Travelers Canada for $3.3 billion, which is expected to close in Q1 2026 after customary regulatory approvals. The acquisition will significantly accelerate the company's growth profile, delivering on its strategic goal of becoming a Top 5 P&C insurer in Canada. To partially finance this acquisition, the company raised $385 million in a private placement of shares on May 27 [1].

The company's financial position remained strong, with book value per share of $31.39, up 19.9% from a year ago. Operating results in the quarter included $50.7 million of net investment income and $21.9 million of distribution income, reflecting strong performance from the company's broker distribution platform. These results, combined with solid underwriting income, generated an operating ROE of 9.6%, despite the active catastrophe experience from Q3 2024 which continues to weigh on operating income in the past 12 months [1].

References:
[1] https://www.newswire.ca/news-releases/definity-financial-corporation-reports-second-quarter-2025-results-892085499.html