Jan. 18, 2021— ECONOMICAL Insurance is hoping to complete its demutualization and planned initial public offering this fall.
The insurer’s 630,000 eligible policyholders will vote on whether to initiate the final phase of the demutualization process in the second quarter, Economical board chair John Bowey said in an update last month.
That will be the third and final special meeting in the company’s demutualization process. The exact date of the special meeting will be set by the board once regulatory approvals have been received.
If the vote at that meeting passes and the demutualization is approved by eligible policyholders, Economical said it will work to complete the remaining steps of the process in a timely manner.
The steps include sending a notice to all current policyholders, completing a process for eligible policyholders to elect cash or shares and submitting a formal application to demutualize to the federal minister of finance — a step required within three months of the third special meeting,
And if required approvals are received from the minister of finance on a timely basis and capital market conditions are favourable, Economical will seek to complete its demutualization.
Economical said it is working to finalize the necessary meeting materials so they can be sent to eligible policyholders once the board formally sets the meeting date.
The company said it recently received court approval to use a virtual meeting format for the meeting.
“Demutualization will help us build a new and dynamic Canadian p&c insurance market leader — one that can meaningfully participate in the trend toward industry consolidation, access the capital needed to develop and grow our business, and have the resources to attract and retain the best talent needed to realize plans for future growth,” Mr. Bowey wrote.
“The net result will be a new Economical with enhanced prospects for growth that can add more choice, stability and assurance to the Canadian marketplace.”
Waterloo, Ont.-based Economical began its bid to demutualize in 2011. If it is successful it will become the first mutual p&c insurer to convert to a stock company.
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