Fairfax sells US pet insurance business in ‘transformational’ $1.4bn deal

Prem Watsa’s  Fairfax Financial Holdings has agreed to sell all of its interests in the Crum & Forster Pet Insurance Group (C&F Pet) and Pethealth, including all of their worldwide operations, to JAB Holding Company.

The “transformational strategic partnership” between the two companies will also see  Fairfax make a $200 million investment in JCP V, JAB’s latest consumer fund.

Fairfax will receive $1.4 billion in the form of $1.15 billion cash and $250 million in seller notes. The transaction is subject to customary closing conditions, including various regulatory approvals, and is expected to close in the second half of 2022.

JAB’s combined global pet insurance and ecosystem platform will be estimated to have gross written premiums and pet health services revenues of well over $1.2 billion by 2023, insuring more than 2.1 million pets.

C&F Pet currently insures over 500,000 pets and markets or serves as underwriter for numerous brands, including ASPCA Pet Health Insurance, 24Petprotect, Hartville Pet Insurance, Spot Insurance Services, Pumpkin Insurance Services and PetCoach, LLC (provider of Petco pet insurance plans) in the United States and Pets Plus Us in Canada. Pethealth provides wellbeing and safety solutions to shelters and pet parents under the 24Pet brand, which includes the 24Petwatch Registry with over 20 million registered pets.

“ Fairfax is very happy to partner with Olivier Goudet and JAB Holding Company,” said Prem Watsa, the founder, chairman and CEO of  Fairfax. ”JAB has had an outstanding track record over the past 10 years and we expect this to continue. While we have sold our pet insurance business to JAB, we will invest $200 million in their JCP V to become their partners. We expect JAB to soon become leaders in pet healthcare and pet insurance globally. We wish them much success.”

Olivier Goudet, managing partner and CEO of JAB, said: “We are extremely excited to partner with Prem and his organisation on this transformational transaction, and to welcome them as a partner in our fund. Prem has an incredible multi-decade track record of building great businesses and compounding returns, and we look forward to accelerating the growth of their pet insurance business as part of our focused pure-play pet insurance platform.”

Dirk Beeckman, CEO of JAB’s pet insurance portfolio, added: “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. It also significantly advances our mission of providing the leading health and wellbeing ecosystem for pets through the offering of affordable, comprehensive pet products and brands throughout a pet’s lifecycle. C&F Pet‘s long history of disciplined omni-channel underwriting fits perfectly with our culture, and we look forward to working with the team.”

Gary McGeddy, president of Crum & Forster A&H, commented: “We are extremely proud of what we have built and accomplished together in the animal welfare community and the pet insurance ecosystem. We are confident that JAB will continue to invest and focus on pets and pet parents while growing their global presence and we are excited about the future and our partnership.”

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