Final vote on Waterloo’s Economic Insurance plan to go public is scheduled for May

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WATERLOO – The final vote on Economical Insurance’s long process to become a publicly traded company will take place in May.

There are 630,000 eligible policyholders who can participate in the webcast meeting on May 20; a two-thirds majority is required for the demutualization process to continue. Final regulatory approval is required from the federal Minister of Finance before an initial public offering (IPO) can be issued.

With a successful vote and ministerial approval, the Waterloo-based company plans to complete its demutualization this fall, moving from a mutual company owned by its approximately 900 mutual policyholders to a publicly traded company owned by shareholders.

“We’ve worked really hard throughout this trip to reach the finish line. We now see it in sight, ”President and CEO Rowan Saunders said on Monday.

If successful, Economical would be the first Canadian property and casualty insurer to demutualize. First announced ten years ago, the process has been formally underway for more than five years.

The final vote was originally scheduled for last year, but concerns about the potential impact of the pandemic on financial performance and the market’s receptivity to a large IPO have resulted in a delay. However, the fourth quarter of 2020 was the 10th consecutive quarter of year-over-year improvements for Economical, ending a year of “historically strong” results, Saunders said.

“When you combine the absolute level of performance with the very positive trend and track record that we have built over the past two years, it has definitely given the Board of Directors tremendous confidence in Economical’s future prospects. “

Demutualization would provide access to capital markets, a key strategic advantage for the future. The insurance industry is changing rapidly and becoming increasingly complex, Saunders said. “This drives an insurance company that wants to stay relevant and be very efficient in its relationships with its clients and brokers having to make very large investments.”

With an industry trend towards consolidation, access to capital is just as important as Economical seeks to grow.

Regular and mutual policyholders would enjoy financial benefits as a result of demutualization; the amounts depend on the performance of the initial public offering.

A fall IPO would come as the company celebrates the 150th anniversary of its founding in November. As part of the process, Economical plans to create a charitable foundation funded by $ 100 million from the IPO.

“It will be very meaningful,” Saunders said. “This is where we can form an important part of our legacy that honors the employees and policyholders who have contributed to our success over the past 150 years.

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