By: Luke Jones, Published on March 9, 2018 10:17 AM, Last Update on March 9, 2018 07:19 AM
Economical Insurance is on the road to demutualization and will become a traded company. If that happens, CEO Rowan Saunders says the insurer will see acquisitions of other companies.
Speaking to Canadian Underwriter on Wednesday, Saunders said part of the reason for demutualization is to raise capital to “participate in Acquisitions”. No prospective targets were given, but the CEO said any future deals will match Economical’s desire to continue to play a large role in Canada’s property and casualty insurance market.
“What is our aspiration as a company?” said Saunders. “It is to be focused on Canada. So it is a Canadian company, operating in Canada. We want to be a leading P&C company and we’re very focused on building a best-in-class operation. That’s what we are trying to do.”
Currently, Economical is a mutual insurance provider, which means customers (policyholders) own the company as a collective. However, the insurer has been heading towards demutualization since 2015, when the Canadian government opened doors for mutual P&C carriers to become public.
Last month the company was granted an extension on its plans for demutualization. The Waterloo, Ont.-based insurance provider was supposed to present its proposal to OSFI by Feb. 22, but an extension has been granted. Economical is still working on its demutualization proposal, which will see the insurer become a stock company to be publically traded.
Economical Insurance is currently federally-regulated, but took advantage of a 2015 change in federal law that allows mutual insurers to demutualize. In 2015, the company’s board of directors and policyholders voted favorably to move to being a stock company.
“Due to the complexity of the process, more time is required to complete the conversion proposal and the professional opinions that are required to be submitted [to OSFI],” Economical announced last month.