July 6, 2020 — IT’S JUST over a year since the Western Investment Co. of Canada announced its re-entry into the p&c market with a 50% share of Fortress Insurance Co.

Considering that Fortress was previously an Alberta-only captive ensuring the Budget Rent-A-Car business and parking at Calgary International Airport, and that it was decidedly small (capitalization: $4m), it could easily have foundered in the tsunami of the coronavirus.

As it turns out, however, the company’s small size and small ambitions let it weather the lockdown with ease.

“It (COVID-19) really hasn’t made much difference at all,” Fortress chairman and CEO Scott Tannas told Thompson’s.

“We don’t have any big, grand plans for rapid expansion. We’re taking capacity as a follower on subscription policies, and we’re content to kind of make that our business for now.”

Riding on the coattails of large, well-established insurers, Fortress has actually seen growth in its first year.

“The pandemic itself seems to have, if not tightened the insurance market a little more, at least kept it fairly tight for commercial and residential property,” Mr. Tannas said. “And so our timing is pretty good, and we’re slowly but surely gaining some opportunities to write business.”

Fortress is looking at the development of a couple of products, probably one to two years down the road.

“That would be niche, specialty insurance products that would be well out of the mainstream, where we think there’s some opportunities for a homegrown player,” he said.

“The current products in that space are dominated by providers that are part of the domestic insurance crowd.

“We are still doing a lot of research around that and we want to take careful steps.”

Together with its partners, WICC has developed an expansion strategy that goes beyond the rental car business and parking lot operation.

Those businesses have been hit hard by the pandemic, but Fortress has been ‘ring-fenced’ against that.

“It’s capital, revenue and expense neutral,” Mr. Tannas said.

For the foreseeable future, Fortress will remain a very small player, taking on a supporting role in policies led by much larger companies.

WICC has a 50% position in Fortress — not 49%, not 51% — so it relies on seeing eye to eye with its partners on expansion plans.

“It’s a true partnership,” Mr. Tannas said. “We know the shareholders; they were significant share-holders in Western Investment Company before we were ever in this business, and when they heard some of my talk about our desire to get into the insurance business they came to us and said, ‘Well look, what do you think about our company . . . is this the kind of platform you’re looking for?’ and we got all excited.”

They applied for and received permission from the Alberta regulator to expand Fortress into property insurance, and eventually were licensed in B.C., Saskatchewan and Manitoba.

“We have been taking on business over the last few months, and now it has started to accelerate.

“It’s a watch and learn strategy.”

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