Economical Insurance held its annual meeting yesterday, using the opportunity to discuss relevant issues with stakeholders – and on top of revealing its results for the year, the company also unveiled demutualization plans.
Economical reasoned that it has to demutualize in order to keep up with its competitors.
“Canada’s P&C insurance industry is consolidating and Economical wants to play a meaningful role in that consolidation,” a statement from the company read.
“For 145 years, Economical has been a mutual insurance company. While this structure has served the company well for decades, Economical is restricted in its ability to access capital,” a release said. “In the longer term, this could become a competitive disadvantage. Economical expects that demutualization will increase Economical’s financial flexibility and long-term strength.”
The company mentioned that demutualization would allow Economical to overcome the limitations of the mutual structure by improving its financial stability and flexibility, as well as allowing the company to easily access capital for acquisition funding.
In addition, the company announced changes to its board of directors.
It has elected John Bowey, Elizabeth DelBianco, Barbara Fraser, and president and CEO Rowan Saunders into the board of directors for three-year terms; Bowey was chosen to serve as board chair.
“I am grateful to John and the board of directors for selecting me to build on the company’s 145-year legacy and to lead the company into a bright future as a public company,” Saunders said during the meeting.
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