Desjardins, General Insurance Group,

Merger & Acquisition

Successfully Transitioning After Merging with State Farm Canada

The Challenge

In January 2014, the Senior Vice-president of Desjardins, Damage Insurance, announced her intention to acquire the Canadian operations of State Farm, one of North America’s biggest insurance companies. This would make Desjardins the #1 damage insurance provider in Ontario, and put it among the top 3 in Canada.

This strategic, financial and operational alliance would have a major organizational impact on both companies, affecting every one of State Farm’s exclusive agents across Canada.

Brio’s multi-year mandate consisted in guiding the client through this transition, from due diligence to full merger, in terms of the day-to-day reality for State Farm employees and agents. This represented a major challenge, considering the merger would affect every aspect of both organizations, including processes, culture, structures, clients and products. Lots of complex problems would be encountered, affecting a large number of people in a short period of time.

The Approach

Brio intervened at different levels to cover all aspects of this major transformation.

First, our consultants integrated all project teams affected by the transformation program in order to optimize the structure and alignment of the various business solutions. In a concrete way, they contributed to defining the optimal management strategy and positioning, as well as elaborating a communication plan and prioritizing action items following the merger announcement and the transfer of State Farm employees to Desjardins.

Then, based on an in-depth impact analysis, we developed and implemented a change management plan to align the operations of both entities (i.e. work processes, systems and technologies, organizational structure based on best practices, understanding Desjardins’ philosophy, etc.). One of the keys to success was properly preparing managers for their change management support role, making sure they would foster understanding, buy-in, and the integration of new processes. Another important factor was the development and deployment of all co-construction activities in cooperation with the client. This resulted in heightened motivation, confidence, collaboration and ownership – which greatly facilitated the transition.

The Brio Difference

Desjardins succeeded in maintaining the acquisition’s equity throughout the transition period, both from a client perspective as well as for the agents and employees involved. This success partly stems from the fact that both partners recognized the importance of early planning and invested in change management to prepare people for the transformation to come, both at State Farm and at Desjardins. By putting managers front and centre in the change management process, we got them to play a supporting role that seamlessly led to change ownership. The retention rate for State Farm managers, employees and agents demonstrates the success of this major transformation.