Economical Insurance “on path to IPO” says CEO
Published: October 27, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
Economical Insurance is in the final stages of its demutualization process and is preparing for its first public offerings. As the company moves to become public, its CEO is seeking to “expand its appetite and capabilities into other segments” of the market.
Rowan Saunders, CEO of Economical Insurance, says “we are now on the path to IPO”. The executive was speaking at the Insurance Brokers Association of Ontario (IBAO) Convention in Ottawa on Thursday. “The clock is running and that means we are doing different things. We are getting the culture of the business ready to adjust to public company expectations.”
In late 2015, the Waterloo-based company announced its plans to demutualize following the Federal Government’s ruling that mutual P&C insurers could become public. Since then, Economical policyholders and board members greenlit the process and the company said it plans to submit its conversion
Once regulatory permission is granted, A.M. Best reported this year in its Canadian Property/Casualty and Life Remain Stable as Economy Rebounds, while Housing Market Bears Watching paper that two policyholder votes will be taken. Economical has already been given policyholder permission, so this process is predicted to go smoothly. Negotiations will centre on the allocation of value for converting the company from a federally regulated P&C insurance provider.
Aside from Economical, there are five remaining mutual P&C companies: Wawanesa, Portage La Prairie, The Kings, and the Heartland Farm Mutual merger between Saskatchewan Mutual/Waterloo Farmers and Oxford Mutual.
The fifth is Gore Mutual, a company that has already said it has no plans of seeking demutualization. Its president and CEO, Heidi Sevcik, was also at the IBAO Convention CEO Panel on Thursday. Sevcik doubled down on the company’s stance.
“On the (Gore Mutual) board, the two key decisions that we have made are number 1, to remain a mutual and that delivers a unique value proposition for our brokers,” Sevcik said in reply to a question from moderator Jim Harris. “Number 2 – 100% broker distribution. What that means for us is we are not building out any direct capability.”