The Travelers Companies, Inc. ( TRV ) , on Tuesday, entered into a definitive agreement to divest its personal insurance and most of its commercial insurance operations in Canada to Definity Financial Corporation (DFY) for around $2.4 billion.

The deal, valued at 1.8x book value after accounting for $0.8 billion in excess capital being repatriated tax-efficiently, allows Travelers to retain its leading Canadian surety business.

The transaction is expected to close in the first quarter of 2026, pending regulatory approvals and customary conditions.

Also Read: Travelers Tops Q1 Estimates On Strong Premium Growth, Profit Hit By Wildfire Losses

Travelers plan to allocate around $0.7 billion of the net proceeds from the sale toward additional share repurchases in 2026, with the remaining funds reserved for ongoing operations and general corporate purposes.

The transaction, along with the buybacks, is expected to be slightly accretive to earnings per share over the next several years.

Travelers Chairman and CEO Alan Schnitzer stated that the evolution of the Canadian market made Definity a natural long-term owner for the business, and the transaction reflects Travelers’ commitment to disciplined capital allocation and long-term value creation.

In April, Travelers reported first-quarter sales of $11.81 billion (+5% year over year), outpaced the analyst consensus estimate of $10.81 billion, and adjusted EPS of $1.91, beating the street view of $0.80.

Investors can gain exposure to the stock via Invesco KBW Property & Casualty Insurance ETF ( KBWP ) and Invesco KBW Property & Casualty Insurance ETF ( KBWP ) .

Price Action: TRV shares closed up 1.79% at $275.88 on Tuesday.

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