Economical Insurance clears final vote on demutualization

Posted on May 20 2021

WATERLOO, ON, May 20, 2021 - Economical Insurance is pleased to announce that eligible policyholders voted overwhelmingly in favour of the company's demutualization today. The third and final special meeting on demutualization, held via webcast, resulted in 97% of eligible policyholders voting in favour of proceeding with demutualization. This approval is a necessary part of the company's long-running process to convert from a mutual company to a publicly-traded share company.

"Today's tremendous support from eligible policyholders is an affirmation that we are on the right path for our company, policyholders, and community," said John Bowey, Board Chair, Economical Insurance. "This is an important day in our 150-year history, as we are one significant step closer to completing the demutualization process, which will allow Economical to unlock our full potential as a strong, Canadian competitor in a rapidly changing industry."

"Economical continues to build its capabilities and performance alongside established digital innovation," said Rowan Saunders, President and CEO, Economical Insurance. "Today's vote aligns well with the momentum we have been building for years to prepare ourselves for the future."

Vote benefits 630,000 Canadians

A successful demutualization of Economical would result in demutualization benefits distributed to 630,000 eligible policyholders. Economical intends to raise cash for payment of the demutualization benefits in an initial public offering (IPO). The value of demutualization benefits that each eligible policyholder may receive would be based on the price of shares sold in the IPO. In addition, $100 million of the proceeds of demutualization have been allocated to fund a new charitable foundation. This foundation will continue Economical's legacy as a valued corporate citizen.

"Economical was created 150 years ago in a small town that is now Kitchener, Ontario, with the idea of neighbour helping neighbour. That value still holds true for our company and will live on in the way we serve our customers and through the significant impact of the charitable foundation that this process will bring to life," said Bowey.

Next steps in demutualization

According to the federal regulations that govern the demutualization process, the final approval following today's successful vote will be the approval of the federal Minister of Finance to demutualize. The timing for the IPO and the demutualization process will be based on market conditions, governmental approvals, company performance, and other relevant factors.

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.

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