Fairfax strikes $1.4bn pet insurance sale to JAB
JAB's expansion in pet insurance comes as the sector is growing at close to 20% a year
Canadian insurance investment group agrees to sell its worldwide pet insurance businesses to the investment firm behind Pret A Manger and Krispy Kreme
Canadian group Fairfax Financial is to sell its global pet insurance operations to consumer-focused investment giant JAB Holding for $1.4bn.
The deal will see JAB’s pet insurance business acquire all of Fairfax’s interests in Crum & Forster Pet Insurance Group and Pethealth Inc, including all of their worldwide operations.
Fairfax will receive $1.4bn in the form of $1.15bn in cash and $250m in seller notes.
Crum & Forster Pet Insurance Group insures more than 500,000 pets and markets or serves as underwriter for numerous brands. Pethealth provides wellbeing and safety products to shelters and pet parents under the 24Pet brand.
Following the transaction, JAB’s combined global pet insurance platform will have gross written premiums and pet health services revenues of more than $1.2bn by 2023, insuring more than 2.1 million pets.
The deal comes as the pet insurance industry has been expanding at a rate of close to 20% a year on a global basis. This growth is expected to continue, driven by attractive long-term trends in petcare and significant opportunities to expand penetration, especially in the US and Canadian markets, which have less than 3% penetration.
“Today’s transaction is a major milestone for us in our mission to become a global leader in pet insurance and the pet health ecosystem,” Dirk Beeckman, chief executive of JAB’s pet insurance portfolio, said. “Crum & Forster Pet’s long history of disciplined omni-channel underwriting fits perfectly with our culture and we look forward to working with the team.”
JAB’s investments include Pret A Manager, drinks firm Keurig Dr Pepper and doughnut brand Krispy Kreme. As a part of the transaction, Fairfax will also make a $200m investment in JCP V, JAB’s latest consumer fund.
Fairfax founder, chairman and chief executive, Prem Watsa, said: “We expect JAB to soon become leaders in pet healthcare and pet insurance globally.”
The transaction is subject to customary closing conditions, including various regulatory approvals, and is expected to close in the second half of 2022.