Economical Insurance calls third and final meeting on demutualization
Completion of the successful demutualization will result in proceeds to more than 630,000 eligible policyholders and a significant new charitable foundation
WATERLOO, ON, March 15, 2021 /CNW/ - Economical Insurance has called the third and final special meeting on its demutualization, the results of which could advance the company's plan to convert from a mutual company to a publicly-traded share company through an anticipated initial public offering (IPO).
At this meeting, all eligible policyholders will be asked to consider a special resolution, which is required to continue the demutualization process. It will be held on May 20, 2021 at 9:00 a.m. ET via live webcast.
"I am incredibly proud of the momentum Economical has built to get us to this important meeting, having achieved historically strong underwriting income in our full year 2020 financial results," said John Bowey, Board Chair of Economical. "Our demutualization journey has been long, but has been guided by our Board's consistent focus on building the capabilities, performance, and value that will give investors the confidence that we can compete as a strong, Canadian public company over the long term."
Details for the final special meeting
All 630,000 eligible policyholders can participate in this final special meeting.
The special meeting has adopted an online-only format due to continued public health concerns relating to the COVID-19 pandemic.
An information circular containing details of the meeting and voting information for the resolution will be sent to eligible policyholders. Eligible policyholders should wait until such materials are received over the next few weeks before taking any action. Attendance at the special meeting is available only for eligible policyholders or their duly appointed proxyholders.
Creating value for Canadians
Continuing its 150-year legacy of being there for Canadians when they need it most, the impact of a successful demutualization will directly benefit more than 630,000 eligible policyholders.
The value of the demutualization benefits distributed to eligible policyholders will be determined by the share price at IPO. That share price is determined at the time of IPO and depends on numerous factors including company performance and market conditions. The proceeds from the IPO will fund the benefits distributed to eligible recipients as cash.
"Our financial results in 2020 included our tenth consecutive quarter of year-over-year improvement, demonstrating the positive impact from many years of investment in our business fundamentals and innovation, which have now taken hold on a sustainable basis. It shows that the time we've taken in building durable value for Economical has been worthwhile and puts us in a strong position for life as a public company," said Rowan Saunders, President and Chief Executive Officer, Economical Insurance.
Additionally, a new charitable foundation will be seeded with $100 million from the proceeds of a successful demutualization. The foundation will be established to support communities in need, honouring Economical policyholders and employees, past and present, and celebrating a heritage of 150 years as a valued Canadian corporate citizen.
"This company came to life 150 years ago with the promise of neighbour helping neighbour, and that promise will be extended through a significant new $100 million foundation that will continue the legacy of giving back that Economical has championed," said Bowey.
The path to completion
If the resolution is passed at the special meeting, Economical would be able to apply to the federal Minister of Finance for the final regulatory approval to demutualize and proceed with the next steps towards becoming a public company. Economical's application to the Minister of Finance must be filed within three months of the special meeting.
Economical will continually evaluate market conditions, company performance, and other relevant factors that may impact the timing and success of its IPO; however, assuming a successful vote at this final special meeting, Economical is planning to complete its demutualization in Fall 2021.
About Economical Insurance
Economical Mutual Insurance Company ("Economical" or "Economical Insurance", which includes its subsidiaries where the context so requires) is a leading property and casualty insurer in Canada, with over $2.8 billion in annual gross written premiums for the year ended December 31, 2020 and over $6.6 billion in assets as at December 31, 2020. Economical is a Canadian-owned and operated company that services the insurance needs of more than one million customers.
Additional Information
This news release and the information contained herein do not, and are not meant to, constitute a solicitation of a proxy within the meaning of the Insurance Companies Act. Economical will send an information circular and notice of the meeting to eligible policyholders in connection with the special meeting and in compliance with applicable laws.
SOURCE Economical Insurance
For media inquiries please contact: Sarah Attwells, Director, PR and Corporate Narrative, Economical Insurance, (C) 416.986-9360, [email protected]; For stakeholder relations inquiries please contact: Dennis Westfall, Head, Investor Relations, Economical Insurance, (C) 416.435.5568, [email protected]; For policyholder inquiries please contact: Join in Our Future, (T) 1-647-777-8911 (toll-free), [email protected]
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