Acquisitions and strategic repositioning (2012-2014)
After fuelling its growth by conquering new markets, SSQ made a number of acquisitions aimed at consolidating its position in the life insurance, auto insurance and travel insurance sectors. The company also adopted a new strategic plan, which repositioned the investment and retirement sector, together with its inaugural sustainable development and societal responsibility plan. These moves reflected SSQ's unwavering desire to maintain its unique character.
SSQ Financial Group went on to write a new chapter in its history in 2012.
Acquisition of AXA Life Insurance
The decision to purchase AXA's Canadian life insurance subsidiary, including its coast-to-coast regional offices and distribution network, marked an important step in SSQ's Canada-wide offensive. It also attested to the company's commitment to growth and operational diversity.
Announced on September 26, 2011, the deal was concluded in January 2012.1 Based in France, AXA wished to refocus its business on geographic areas with stronger growth. SSQ Financial Group sought to strengthen its previously marginal position in individual life insurance, so the timing of the transaction was ideal for both companies. AXA's Canadian subsidiary, however, was actually acquired from Intact Financial Corporation, which specialized in property and casualty insurance and had previously acquired all of AXA Canada's assets.2 Previously, SSQ's individual insurance business had been limited to products offered to group plan members approaching retirement. SSQ's CEO, René Hamel, explained that the main objective of this transaction was to "build up SSQ's arsenal".3
Thanks to the acquisition of AXA's Canadian operations (renamed SSQ Insurance), SSQ Financial Group now had a life insurance subsidiary. Better still, it had a Canada-wide product distribution network and new offices in Vancouver, Calgary, Toronto and Halifax (AXA also came with a network of over 2,000 advisors). SSQ Insurance was counting on synergies between its new cross-Canada network and that of its investment and retirement sector. René Hamel offered this explanation in an interview with the Journal de l'assurance: "In the past, AXA's representatives headed out with a briefcase full of life insurance products; SSQ's representatives did the same with investment products. Today, they both have a more complete product line to offer."4 This transaction also brought SSQ a $50-million portfolio of group insurance products in highly specialized niche markets (expatriate workers, critical illness, etc.).
This $300-million transaction was financed by an injection of capital from the FTQ's solidarity fund, which held a 71% ownership stake in SSQ. Due to this financial arrangement, the decision-making structure had to be reviewed to ensure better representation for the primary shareholder. The majority of the board seats, however, remained under the control of SSQ's insured members. Thanks to the very favourable reaction of the market and financial advisors, hopes were high for this new business line, which had $151 million in premiums written in 2012.
Still, AXA's integration posed a significant challenge to SSQ, although the complementary nature of the two companies did facilitate the process. With employee support, the integration plan was implemented successfully, as shown by the results of the revived individual insurance products, combined with various enhancements aimed at bringing client service up to SSQ's standards. The ambitious sales targets set during the first year of post-merger operations were reached (sales in 2013 were approximately three times higher than the pre-merger figure for AXA).
The acquisition of AXA Life Insurance was preceded and followed by additional acquisitions involving product distributors (e.g., replacement insurance and loan insurance with clients of auto and recreational vehicle dealerships). These companies, were based in Trois-Rivières under the name of SSQ Evolution. In 2014, SSQ also acquired assurancevoyages.ca, a travel insurance distributor. These acquisitions all served to expand SSQ's product line; the company was now much better equipped to pursue its Canada-wide growth.
2013-2017 strategic plan
SSQ's new strategic plan aimed for strong organic growth in all business lines while continuing to strike a balance between performance and risk taking, in keeping with its mutualist values. Nevertheless, a market watch function and a mechanism for evaluating potential acquisitions were implemented. Financial forecasts, however, were strictly based on internal growth. SSQ also began emphasizing new technologies, particularly e-business.
But group insurance remained SSQ's stock in trade. The company's sales in this sector outside Quebec equalled those in Quebec, where it regained first place in 2013 (today, annual sales are in excess of $200 million, ten times higher than in the early 1990s). Now more than ever, SSQ was focused on the quality of service offered to insureds, particularly via new technologies. It also enhanced its product offer in the areas of classic and specialized coverage.
The investment and retirement sector also reached a new milestone in 2012 when sales topped $1 billion. This sector was also on the receiving end of a strategic repositioning as SSQ decided to remain active in individual savings products distributed by a Canada-wide network of brokers and financial advisors. The company also continued to manage pension fund investments through its diverse platform of segregated funds.
However, SSQ decided to stop administering group pension plans, marking the end of a longstanding collaboration with Bâtirente and Fondaction.5 Its portfolio of group plans was subsequently sold to Industrial Alliance.
Following this repositioning, an agreement was signed with FTQ's solidarity fund to make savings and retirement products available to shareholders.6 Meanwhile, the Canada-wide distribution network for SSQ's investment, retirement and individual insurance products had grown by nearly 3,000 new brokers over the previous two years.7
SSQauto revamped its operating systems as it continued to embrace innovation. The Kilo™ program, launched in 2012,8 was the first of its kind in the auto industry: insurance rates were based on distance traveled. The idea itself was not new, although the formula developed by SSQauto was certainly original (i.e., users were responsible for calculating the average number of kilometres driven per year, whereas the standard practice was to install an electronic monitoring system in the vehicle). And with Body Shop Direct™, launched in 2013, insured members received progress reports (via email or text message) on repairs being made to their vehicles. The announcement of this initiative underscored the fact that this service was fully consistent with SSQ's values of accessibility and transparency.9
SSQ's real estate subsidiary has also remained very active. Once construction on Cité Verte is complete, houses and condos will be sold and commercial space rented out. In the fall of 2013, the provincial association of city planners (OUQ) ranked Cité Verte among the top 50 projects of the past 50 years in Quebec, alongside such high-profile achievements as Expo 67, Montreal's subway system and the Old Town heritage site in Quebec City.
SSQ's management is weighing the idea of relocating its workforce in Quebec City following the purchase of a site located at 2475 Boulevard Laurier (i.e., adjacent to the company's headquarters). All staff in the greater Montreal region (currently working at five separate sites) will be relocated to Longueuil in 2016 in the SSQ Tower, which is under construction near Jacques Cartier Bridge and the Place Charles-Le Moyne subway station.
Thanks to these acquisitions, SSQ has soared to new heights. A review of the 2008-2012 strategic plan indicates that assets under management and administration jumped from $4.3 billion to $10.9 billion, while shareholders' equity rose from $236 million to $378 million. The outcome of the first year of the new plan was equally positive, having contributed to the encouraging results in all business lines. SSQ was in excellent financial shape, having obtained an A- (excellent) ranking from the prestigious agency A.M. Best in 2012 for its solid performance and another a- for the quality of its credit standing.10 In addition to boosting SSQ's workforce by 250 employees, AXA's acquisition resulted in various changes to SSQ's management team.
The company's workforce was also asked to rally around the sustainable development and societal responsibility plan adopted in 2012.
Today, SSQ Financial Group has some 2,000 employees working at its headquarters and in various regional offices. Service quality is still one of the company's key concerns. René Hamel explains: "Our goal is to ensure that our clients have an enjoyable experience every time they contact us, whether in person, by email, on the phone or by regular mail."11 SSQ continues to pin its hopes on employee expertise (thanks to various training programs), together with a high-quality work environment and careful succession planning.
The company's managers have access to the Leadership Education and Development (LEAD) program and SSQ's new Centre for Change Management Staff members also continue to reap the benefits of LOMA's insurance education program. In addition, an internal communications policy, put in place in 2012, seeks to foster discussion between management and staff.
Since 2009, SSQ Financial Group has qualified for Healthy Enterprise certification, under which it seeks to maintain employee health and make sustainable improvements by providing a healthy work environment. In 2011, SSQ was one of the few companies in Quebec to obtain Healthy Enterprise Elite certification. In addition, SSQ's HealthWise program offers a wide array of activities designed to promote health and prevent illness via healthy lifestyles, psychological health, work/life balance and healthy management practices. Additional awards, including a number of Canada-wide honours, recognized SSQ's ongoing efforts to promote health and well-being in the workplace.
Staff recruitment remains a challenge for insurers, particularly in the greater Quebec City region. Since May 2014, René Hamel has headed the CDASF (an insurance and financial services development centre founded in 2007). The objectives of this organization continue to be of great relevance, particularly in light of the growth of Quebec City and Lévis-based insurance companies. As a major employer, SSQ remains focused on staff succession planning via a range of initiatives, including networking with educational institutions, recruitment campaigns and internships for insurance students.
Sustainable development and societal responsibility plan (2013-2017)
In June 2013, SSQ Financial Group, as part of a new plan, announced the implementation of various strategies to guide its actions and governance over the coming years. Even though the principles of sustainable development and societal responsibility had been longstanding sources of inspiration, they had never before been incorporated into a multi-year action plan with such precise objectives.
The company's actions in these areas were based on mutualist values and sought to achieve a socially and environmentally responsible form of economic development. For SSQ, sustainable development is much more than an environmental approach; it must also promote individual well-being and progress at the community level. René Hamel explains: "The 21st century economy and its underlying challenges mean that companies and other organizations must serve the population and must constantly review how they operate."12
Integrating corporate functions
Following AXA's acquisition, Bernard Tanguay, who previously headed the investment and retirement sector, was promoted to senior vice-president of SSQ, Insurance Company Inc. He was also tasked with overseeing the new subsidiary's day-to-day operations.
In 2012, SSQ completed the integration of its corporate functions, appointing Serge Boiteau strategic advisor to the CEO (he also retained his position as the group's designated actuary). Éric Trudel, who had 20 years of experience at the company as an actuary and then as manager of major group insurance accounts and vice-president of actuarial in the group insurance sector, was appointed senior vice-president of corporate services with responsibility for corporate development, legal services, internal audits and risk management, in addition to corporate actuarial, reinsurance and pricing. To date, SSQ is the only insurer in Canada to have fully integrated its corporate functions.
SSQ, Mutual Management: new structure, same valuest
AXA's acquisition also led to various changes at SSQ, Mutual Management, although the subsidiary maintained its predominant role within SSQ. SSQ, Mutual Management's board of directors was reduced from 15 to 12 members, all of whom now served on the boards of SSQ, Life Insurance and SSQ, Mutual Holding, as well as that of SSQ Insurance, the new SSQ Financial Group entity.13
The best of both worlds
Once again, SSQ Financial Group benefited from its unique position as a mutual insurer supported by the FTQ's solidarity fund, otherwise known as "Quebec's largest network for development capital investment."
To enable employees of the companies comprising SSQ Life's shareholder group to benefit from SSQ Insurance's results, the shareholder plan for the employees of SSQ's companies, which had been in effect since 1993, was replaced by a new formula. In the future, eligible employees would hold units of an exclusive segregated fund created by SSQ Life, the fund would consist solely of shares of SSQ, Mutual Management Corporation.14
Under the financial agreement granting it more than 80% of the shares of SSQ, Life Insurance Company Inc., the FTQ's solidarity fund could have appointed a majority of SSQ Life's board members. Nevertheless, it requested only five seats, leaving mutualist insured members in control of the company. As Pierre Genest explains, "The solidarity fund believed firmly in the importance of maintaining a mutualist culture at SSQ."15
This culture was expressed most notably by the participation of delegates from across Canada in SSQ's annual general meetings. SSQ, Mutual Management was represented by 181 delegates in 2013. This subsidiary also continued to promote mutualist values among employees via training sessions in which the advantages of the cooperative and mutualist formula were discussed (the committee tasked with promoting mutualist life extended this initiative in various ways throughout the year). Special emphasis was also placed on young people, most notably via support for the annual start-up of a services cooperative run by the children of SSQ employees.
The events of 2012, which was proclaimed International Year of Cooperatives by the U.N.'s General Assembly, revealed the importance of this economic model for the planet. A global ranking of the largest 300 cooperatives and mutualist companies was also issued, with SSQ in 193rd place (43% of the companies on the list operated in the insurance sector). 2012 was also marked by various other activities, including the senior management team's participation in the inaugural International Summit of Cooperatives, held in Quebec City, and the organization of a series of lunch conferences, in which cooperators discussed missions to foreign countries (with SOCODEVI's support). In addition, a tribute was paid to Yves Demers when SSQ Financial Group's main training room was named the Formathèque Yves Demers.16
SSQ remained an active member of SOCODEVI (the international development cooperative), in addition to the provincial cooperation and mutualism council (CQCM) and the foundation for cooperative and mutualist education (FECM).
Giving back to the community
This mutualist spirit was also reflected in community involvement, one of the core principles of the International Cooperative Alliance. SSQ and its employees (including retirees) make it a point of honour to show solidarity with the disadvantaged. This commitment is expressed in various ways.
In 2013, René Hamel agreed to co-chair the campaign of the Quebec and Chaudière-Appalaches chapter of Centraide/United Way. Altogether, SSQ's employees, retirees and the company itself raised $258,000 for Centraide/United Way, which for several years has been the primary beneficiary of SSQ's largesse.17 In addition, the funds raised during the SSQ Quebec City Marathon are used to support a different charity each year. In 2013, the Maison de Lauberivière, located in Quebec City's Lower Town, received $128,000. SSQ's employees also volunteered their time to organize a soup kitchen and a clothing drive for the Maison.18 And in 2014, $106,423 was donated to the Fondation du CHU de Québec's Seinbiose project.19
Encouraging volunteerism is one of the central pillars of SSQ's sustainable development and societal responsibility plan. To that end, the company financially supports employees who get involved in their communities. In 2013, the company also donated 1% of its net profits to various foundations and organizations operating in the main cities in which it is present. A series of "green" criteria are now set out in the company's donation and sponsorship policy. In addition, the SSQ Foundation continues to support groups working with young people.
Today, SSQ Financial Group is a company with a forward-looking business model. At a time when the neo-liberal economic model is being called into question by a string of financial scandals and in a context of sustainable development, the mutualist model is more relevant than ever before. With more than 1 million policy and contract holders, some 2,000 employees and nearly $11 billion in assets under management, SSQ Financial Group has become one of Canada's greatest financial companies. Its success is all the more remarkable considering the many obstacles that have stood in its way.
With an extensive range of products and services tailored to customer needs, SSQ Financial Group has successfully diversified its activities and gained a foothold in every niche it has pursued:
- Group insurance
- Individual insurance
- Property and casualty insurance
- Real estate
The Group's positioning in Canada seems very promising as its name recognition keeps on growing. The key to continued success lies in maintaining service quality and putting people first—values the company has consistently promoted throughout its history—as well as remaining competitive and efficient. For René Hamel, the future is bright. SSQ is a modern and high-performance financial institution with its values in the right place!
- SSQ Financial Group, press release, September 26, 2011, New Major Acquisition for SSQ Financial Group, (page consulted on August 27, 2014).
- Rose-Line Brasset, interview with René Hamel, November 26, 2012. A total of 14 companies were in the running; SSQ's proposal was accepted by Intact.
- Jacques Saint-Pierre, interview with René Hamel, August 20, 2014.
- Alain Thériault, "Avec l'achat d'AXA Vie, SSQ réaffirme sa confiance dans l'assurance vie malgré la tourmente", Journal de l'assurance, February 21, 2012, (page consulted on June 11, 2013).
- Jacques Saint-Pierre, interview with René Hamel, August 20, 2014.
- SSQ Financial Group, 2013 Annual Report, p. 18.
- SSQ, Financial Group, press release, February 28, 2012, (page consulted on June 27, 2013).
- "A First in Canada: Body Shop Direct.™ Track repairs being done to your vehicle thanks to SSQauto!", SSQauto press release, January 15, 2013, (page consulted on August 26, 2014).
- A.M. Best is a global insurance industry specialist. SSQ Financial Group, 2012 Annual Report, p. 14.
- SSQ Financial Group, 2012 Annual Report, p. 18.
- SSQ Financial Group, press release, June 17, 2013, "SSQ Financial Group's Sustainable Development and Societal Responsibility Plan", (page consulted on August 28, 2014).
- SSQ, Mutual Management, 2011 Annual Report, p. 3.
- SSQ, Mutual Management, 2012 Annual Report, p. 3.
- SSQ, Mutual Management, 2011 Annual Report, p. 3.
- SSQ, Mutual Management, 2012 Annual Report, pp. 2-3.
- SSQ Financial Group, 2013 Annual Report, p. 20.
- SSQ Financial Group, press release, September 26, 2014, (page consulted on October 10, 2014).