Oct. 4, 2021 — ECONOMICAL Insurance and a newly formed parent company called Definity Financial Corp. filed a preliminary prospectus this summer for an initial public offering pending final approval of the insurer’s plan to demutualize.
If the plan is approved, shares in Definity would be listed on the Toronto Stock Exchange. Cornerstone investors include the Healthcare of Ontario Pension Plan, which has agreed to purchase 19.9% of Definity’s common shares, and Swiss Re Investment Holdings Inc. — a subsidiary of reinsurance giant Swiss Re — which will purchase $200m worth of stock.
The share offering has not yet become final for the distribution of securities to the public and the demutualization plan still requires approval from the federal Ministry of Finance.
If the final nod is granted, Definity will become the parent company of Economical Insurance and its sister companies Family Insurance Solutions, Petline Insurance Co. and Sonnet Insurance Co.
Economical’s shareholding ‘mutual’ policyholders approved the company’s conversion proposal more than two years ago and the remaining 630,000 regular policyholders voted in favour in May.
Under the plan, proceeds from an IPO would be split several ways: 20% would be allocated to Economical’s 878 mutual policyholders, $100m would fund the establishment of a charitable organization and the remainder would be distributed among regular, non-voting policyholders who had policies in force on Nov. 3, 2015.
If the plan receives final federal approval, Economical will become the first mutual p&c insurer to convert to a publicly traded company.
The deadline was October 1 for eligible policyholders to elect the type of benefit they receive.
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