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Both Wawanesa and Western also underwrite their own insurancepolicies. The deal between Wawanesa and Desjardins, which uses a similarco-operative-ownership model wherein customers own the business instead ofshareholders, also highlights the trend of mergers in the insurance industry –particularly in the property and casualty spaces, where the market is highlyfragmented. Among the deals last year, Desjardins sold a pet-insurance business toanother mutual insurer, and Aviva Canada Inc. bought the Royal Bank of Canada’shome and auto-insurance business. More mergers are expected in the coming yearsas the more than 200 providers of home, auto and business insurance in Canadafight for market share and brand recognition. Desjardins first bought Western Financial Group for roughly $440-million in2010 as part of its push to expand beyond its Quebec marketplace and identifynew ways to distribute its insurance products – both life and property as wellas casualty. Western operated with a significant amount of autonomy and grewfrom 500,000 customers to nearly 800,000. But when Desjardins acquired theCanadian arm of U.S. mutual insurer State Farm Insurance Co.

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