Update on the Economical Group demutualization process | General financial discussion | Discussion forum

A quick update on the demutualization process of Economical Group: The company's mutual policyholders, of which there are reportedly about ~875-899 remaining, voted 99% in favour of proceeding with demutualization at a meeting held on March 20, 2019. They are holders of a legacy insurance product that is no longer sold.

Now, Economical Group, which also owns the direct-to-consumer property & casualty insurance brand Sonnet Insurance, is going to seek OSFI's approval to hold a third vote of its ~630,000 non-mutual policyholders (unclear if Sonnet Insurance policyholders are included in this calculation).

According to an interview Economical's CEO gave to BNN Bloomberg's The Street, either the show's host, Paul Bagnell, or guest co-host, portfolio manager Norman Levine, reported that the mutual policyholders were in line to receive ~$450,000 in the eventual IPO, once all of the votes and regulatory approvals are in place. Pricing, obviously, depends on how well the IPO does, but the non-mutual policyholders could still receive up to ~$2,000.

I suspect that the IPO will be well priced and over-subscribed because they are a very large P&C insurer in Canada - we only really have Intact Financial. No idea when the IPO will take place, but likely not before this time next year (2020).

Also, Economical reported ~$8 million in ongoing demutualization-related costs for the preceding three months, so 'tis definitely an expensive process. The lawyers, accountants, and consultants are lovin' it. 😉

The next biggest one would be, maybe Wawanesa...I wonder if they'll ever demutualize? 😉

Cheers,
Doug