The leader of the Economical Mutual Insurance Company shared her ambitious vision of making the company the leader in property and casualty insurance, following two years of tough cuts throughout the network.
“We are fully committed to becoming the leading property and casualty insurance provider in Canada,” Gavan told those assembled yesterday in Waterloo, Ont. for the Economical’s annual general meeting. “Our vision is ambitious. To achieve our vision we must be able to deliver sustainable profitable growth. We are driving our growth strategy with focus and discipline.”
Gavan touched on the ‘tough love’ program that was introduced in 2012, streamlining operations through a number of layoffs that included the reduction of
145 positions at 14 offices across the country, and the
closing of branches in New Brunswick and Ontario in 2013.
“As you are aware, in 2012 we undertook a program to improve the efficiency and effectiveness of our operations. It required us to make tough but necessary decisions to enhance the future performance of the company,” said Gavan. “In a remarkably short period of time, we have streamlined and simplified how we do business by improving our productivity. This is essential to delivering service to our broker partners.”
Gavan added that the she wants the Economical to be recognized by brokers as their preferred business partner.
“This means delivering on our broker value proposition, working collaboratively to deliver superior value to our customers,” she said. (continued.)
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The cuts did work, as Gavan produced slides that showed a reduction in operating expenses by $60 million – the equivalent of 20 per cent of the operating expense base – over two years starting in 2012.
“By the end of 2013, we achieved close to 80 per cent of our overall expense reduction target and are on track to complete the transformation program this year,” she said. “I am particularly proud of our IT department. In only one year, they reduced their annual expense base by more than $27 million, surpassing their target by 10 per cent.”
Other savings were realized in underwriting expenses (almost $12 million), and the elimination of more than $7 million in business expenses.
