September 2021 – Momentum

Following the success of the last special meeting on demutualization in May, we have continued to make progress in our demutualization process. Promptly after the meeting we submitted our application to demutualize to our federal regulator and completed initial regulatory filings with securities regulators in Canada. While we do not have definitive timing on the final approval by the Minister of Finance, we are continuing to move at pace on the other activities we need to complete as part of our demutualization.

Introducing Definity Financial Corporation

As part of our demutualization journey, we are pleased to share more details about our future new parent company – Definity Financial Corporation. Following demutualization, this future parent company will own all our operating companies - Economical, Sonnet, Petline, and Family Insurance. Definity is a new brand that complements our existing culture and connects our distinct family of brands. Following a successful completion of our demutualization, Definity will be our publicly-traded parent company and we are pleased to report that it has completed its initial regulatory filings with Canadian securities regulatory authorities.

As part of that branding, the Economical Insurance Heritage Foundation has also changed its name to the Definity Insurance Foundation. Despite the change, the Foundation remains focused on honouring the legacy of past and present policyholders and employees of Economical by working to have the greatest impact on our communities. Its name may have changed, but that purpose has not.

As an independent registered charitable foundation, the Definity Insurance Foundation will work with community partners across Canada to tackle inequity, reduce barriers to good health and opportunity, and address climate-related challenges. With a vision to help build a healthy, equitable, and flourishing world, the Foundation will focus on supporting causes that enable marginalized and underserved Canadians and Canadian communities to thrive in a more livable world. For more information on the Foundation please visit definityfoundation.com.

Choosing Financial Benefits

The benefit election window is now open to eligible policyholders in our demutualization, allowing some the opportunity to indicate how they would like to receive their benefits — cash, shares in our new parent company, or a combination of both. For those eligible policyholders given the option by our Conversion Plan to elect the type of benefit they receive, there is a short window for them to provide us with that guidance. We have sent all eligible policyholders a package that outlines options they have, along with instructions on how to act on those options. We are also encouraging all eligible policyholders to verify that the name(s) and addresses we have on file are correct to ensure they receive their benefits following demutualization.

It is important to note that the period to provide us this information closes at 5 p.m. ET on October 1, 2021. While the majority of eligible policyholders will receive this package in the mail, we strongly encourage providing us this information online at joininourfuture.com. If we do not receive the information by October 1, eligible policyholders will receive the default option as outlined in the Conversion Plan.

Eligible policyholders need to consider any potential financial or tax implications of receiving financial benefits and are encouraged to contact their own personal tax or investment advisors. Economical is not able to provide any tax or investment advice to eligible policyholders.

Canadian Federal Election

Many eligible policyholders have asked what the impact of the recently announced federal election may be on our process. To be clear, the current federal election does not alter our plan to demutualize, which requires the approval of the Minister of Finance to complete.

The announcement of a federal election for September 20, 2021 may impact the workings of the federal government for a short time, but this is not something we can control. We continue to work with the government and our regulator to advance the elements of regulatory approval that are within our control. This includes the application to demutualize which we have already submitted, as well as ongoing communications with our regulator and the completion of our benefit election process. We will provide an additional update on progress for eligible policyholders once the federal election is completed this fall.

Your Continued Support

As we take these final steps on our demutualization journey, we are pleased to have this opportunity to share with you these important progress updates and we thank eligible policyholders for their continued support. As we celebrate 150 years of serving the insurance needs of Canadians, we are excited to embrace the road ahead.

Economical Insurance

Click Here to Download the News Release on our New Parent Company.

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