Sept. 28, 2020 — THE REGULATORY process for Economical Insurance’s bid to demutualize has been slowed by the COVID-19 pandemic crisis, its board chair said in an update in September.
“Our current best estimate is that our timeline has slipped by quarters and not years,” John Bowey said, referring to a planned initial public offering that would follow final shareholder and regulatory approval. The company announced earlier this year that a final special meeting of shareholders would not be held in 2020, as had been planned before the pandemic.
“While we continue to make good progress, regulators and government officials have concurrently been focusing on important work to protect the health and welfare of Canadians, and the stability of our economy during the pandemic,” Mr. Bowey said.
“As a result, governmental engagements have been taking longer than normal.”
He said the company has been working with the federal Department of Finance and its advisers to understand the potential impact of the recently appointed minister of finance and also the government’s decision in August to prorogue Parliament until Sept. 23.
“We do not currently expect these changes to adversely impact our prospects of securing the required approvals, but it may impact our pace and timing.”
He said Economical is focusing on building a track record of profitable financial results and securing regulatory and governmental approvals.
“Once those factors are sufficiently advanced, capital markets conditions will need to be favourable and open for an IPO to proceed at that time,” Mr. Bowey said in the update.
“The board continues to monitor market conditions and volatility as we move closer to a potential IPO date.” He said he expects Economical will be in a better position to share a more concrete perspective on the timing for its demutualization bid later this year. If it is successful, Economical will be the first p&c mutual to convert to a share company.