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Economical Insurance is one step closer to demutualizing after submitting its conversion proposal for becoming a public company to the Office of the Superintendent of Financial Institutions (OSFI) at the end of June. Following OSFI approval, Economical will call a meeting of eligible mutual policyholders, who will vote on whether they want the process to continue.
While demutualization was announced almost a decade ago, it’s only really been the last couple of years that Economical has been involved in the process.
“It really has been a journey that started sometime late in 2010 when the board made this decision to pursue demutualization because we thought it was in the long-term best interest of the company,” said John Bowey, chair of Economical’s board of directors and its special committee on demutualization. “The reality is we spent the first five or six years of that journey just waiting for the government to provide us the regulations we needed to be able to do it.”
In the meantime, the insurer has been setting itself up for success as a potentially soon-to-be public company. An ambitious agenda to make Economical a stable long-term player for brokers and customers has resulted in a strategy that keeps the company focused on customers by making sure they’re being served how they want to be served, according to Bowey.
“All along, we’ve had in our minds the realization that we’re on a journey to make Economical a truly outstanding high-performing business leader in the P&C insurance industry in Canada, and we want to do that as a strong and independently public company. To do that, we really need to differentiate ourselves within our industry,” explained Bowey.
The launches of Sonnet and, more recently, Vyne, which helps Economical’s broker partners support their customers through faster service and better workflows, have been part of that growth, as has the acquisition of pet insurance company Petline and the development of a leadership team that matches the skills and success of any in the industry, said Bowey.
“When the time comes, we’ll be ready to access the capital markets through our IPO to further enable our plans to be a leader in our industry,” he told Insurance Business. “We certainly have not been sitting still and I think we’ve used the time – the delay in the demutualization process – to really position ourselves for success.”
The company has certainly “sown the seeds for a growth engine,” as Bowey puts it, with the hope and expectation that an IPO will follow soon.
“One thing is for sure, we can see the finish line in sight and we’re much closer than we’ve ever been,” he said. “We’re very optimistic that this will now come to a conclusion.”
