Canadian insurer Intact Financial has agreed to buy specialty lines insurer The Guarantee Company of North America and managing general agent Frank Cowan Company in a cash deal worth around C$1bn.

Guarantee has operations in Canada and the US. Specialty lines and surety account for two-thirds of the firm’s business, while personal lines accounts for one-third.

Frank Cowan offers specialty insurance services to municipalities, healthcare, education, children’s and social service organisations in Canada. The business’ service suite includes coverage placement, risk management consultation, as well as claims services.

Princeton will continue to own Cowan Insurance Group, Cowan Asset Management, and Fountain Street Finance.

Princeton chairman of the board Maureen Cowan said: “After careful consideration, we believe that combining our strong customer focus and the expertise of our employees in specialty lines and surety, with Intact’s resources, in particular its advanced analytics capabilities, provides tremendous opportunities for the combined entities to leverage one another’s strengths to build an outstanding, Canadian owned, North American specialty insurer.”

The transaction is pending regulatory approvals, with closure anticipated in the final quarter of this year.

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Intact expects the deal to immediately add to its net operating income per share and add new products for its HNW clients.

Intact CEO Charles Brindamour said: “The acquisition of The Guarantee Company of North America and Frank Cowan Company is strongly aligned with our strategic and financial objectives.

“We are delivering on our objectives to grow in Canada and build a leading North American specialty platform.”