Economical Insurance

Last updated
Economical Insurance
Type Subsidiary
Industrymutual insurance
FoundedNovember 25, 1871;151 years ago (1871-11-25)
Kitchener, Ontario, Canada
FoundersA group of Kitchener people
Headquarters Waterloo, Ontario, Canada
Number of locations
13
Areas served
 Alberta
British Columbia
Nova Scotia
Ontario
Quebec
Parent Definity (
, 2021-)
Website economical.com

Economical Insurance, founded in 1871, is a Canadian Property & Casualty insurance company, offering automobile, property, liability, agriculture, and surety insurance. Its executive offices are located in Waterloo, Ontario, with regional offices across Canada. [1] The company has a 4.02% market share, measured by direct written premium in the Canadian Property & Casualty Insurance market as of December 2012. [2] As of 2014, it had about 1.6 billion in mutual policyholder's equity. It is the 9th largest property and casualty insurance company in Canada, by direct written premium and the 20th largest insurance company in Canada, by total assets. [3]

Contents

The firm owns several operating subsidiaries, the largest of which is Economical Mutual Insurance Company. Other member companies are Perth Insurance Company, Waterloo Insurance Company, The Missisquoi Insurance Company, and Federation Insurance Company of Canada.

History

The company was established when a group of people in Berlin (now Kitchener), Ontario created a plan to protect themselves and their neighbours from the hardships caused by fire and lightning in 1871. [4] [5] On November 25, Economical Mutual Fire Insurance Company of Berlin issued its first policy on a house and barn. [6] In 1887 the company opened its headquarters on the main street of the Berlin. [5] One of the early directors of the company was Moses Springer, a Member of Parliament. [7]

During World War I, the company became involved in controversy when its general manager, ex-mayor W. H. Schmaltz, opposed the renaming of the town of Berlin to Kitchener. [5]

The company expanded over the years, both in terms of geography and type of products offered. In 1937, Economical expanded into Quebec by purchasing Merchant's Casualty Company of Waterloo. Ten years later, Economical expanded into the Maritimes through acquiring the Canadian operation of Northwestern Mutual Fire Insurance Association. Meanwhile, the company started to offer automobile, accident, and illness insurance in addition to property insurance.

Economical acquired The Missisquoi and Rouville Insurance Company of Quebec, The Perth Mutual of Stratford, Waterloo County Mutual Fire Insurance Company, the insurance-related assets of the Family Group of Companies of British Columbia, Federation Insurance, Hartford Insurance Company of Canada [8] in 1956, 1968, 1980, 1999, 2000, and 2001 respectively. In 2006, The Mattei Companies of Seattle, Washington joined Economical Insurance, becoming the company's first subsidiary outside Canada.

Throughout these changes and additions, the company's headquarters remained in the same municipality, now the city of Kitchener-Waterloo. [9] By 2001, Economic Insurance Group was writing over one billion dollars in premiums annually. [10] By 2014, this had increased to $2 billion. [11]

Recent developments

In December 2010, the board of Economical Mutual Insurance Company announced its intention to pursue demutualization, [12] which would mean that some of its policy holders would become shareholders. [13] It is the first Property & Casualty Insurance company in Canada to do this. [14] However, as of 2014, the demutualization was temporarily on hold, pending finalization of new federal regulations governing this process. [15] According to the Globe and Mail, the upcoming demutualization has made the company a potential target for takeover bids from other Canadian and international insurance companies. [16]

In 2012 and 2013, Economical reduced its staff by laying off more than 280 of its employees. [17]

The final vote to approve demutualization is slated for Spring 2021. [18]

Awards and recognition

Economical Insurance has been ranked in a Top 125 companies list in Training magazine for excellence in workforce learning and development in the year 2013. [19]

On April 9, 2014, independent rating agency A.M. Best affirmed the financial strength and issuer credit rating of Economical Insurance as “A- (Excellent)”. [20]

Related Research Articles

<span class="mw-page-title-main">Insurance</span> Equitable transfer of the risk of a loss, from one entity to another in exchange for payment

Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

Aetna Inc. is an American managed health care company that sells traditional and consumer directed health care insurance and related services, such as medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans, primarily through employer-paid insurance and benefit programs, and through Medicare. Since November 28, 2018, the company has been a subsidiary of CVS Health.

Demutualization is the process by which a customer-owned mutual organization (mutual) or co-operative changes legal form to a joint stock company. It is sometimes called stocking or privatization. As part of the demutualization process, members of a mutual usually receive a "windfall" payout, in the form of shares in the successor company, a cash payment, or a mixture of both. Mutualization or mutualisation is the opposite process, wherein a shareholder-owned company is converted into a mutual organization, typically through takeover by an existing mutual organization. Furthermore, re-mutualization depicts the process of aligning or refreshing the interest and objectives of the members of the mutual society.

<span class="mw-page-title-main">John Hancock Financial</span> American insurance company

John Hancock Life Insurance Company, U.S.A. is a Boston-based insurance company. Established April 21, 1862, it was named in honor of John Hancock, a prominent American Patriot.

<span class="mw-page-title-main">Sun Life Financial</span> Canadian insurance company

Sun Life Financial Inc. is a Canadian financial services company. It is primarily known as a life insurance company.

<span class="mw-page-title-main">Liberty Mutual</span> American multinational insurance company

Liberty Mutual Group is an American diversified global insurer and the sixth-largest property and casualty insurer in the United States. It ranks 71st on the Fortune 100 list of largest corporations in the United States based on 2020 revenue. Based in Boston, Massachusetts, and featuring the Statue of Liberty on its logo, it employs over 45,000 people in more than 900 locations throughout the world. As of December 31, 2021, Liberty Mutual Insurance had $156.043 billion in consolidated assets, $128.195 billion in consolidated liabilities and $48.2 billion in annual consolidated revenue.

<span class="mw-page-title-main">The Travelers Companies</span> American insurance company

The Travelers Companies, Inc., commonly known as Travelers, is an American insurance company. It is the second-largest writer of U.S. commercial property casualty insurance, and the sixth-largest writer of U.S. personal insurance through independent agents. Travelers is incorporated in Minnesota, with headquarters in New York City, and its largest office in Hartford, Connecticut. It has been a component of the Dow Jones Industrial Average since June 8, 2009.

<span class="mw-page-title-main">Manulife</span> Canadian multinational insurance company and financial services provider

Manulife Financial Corporation is a Canadian multinational insurance company and financial services provider headquartered in Toronto, Ontario. The company operates in Canada and Asia as "Manulife" and in the United States primarily through its John Hancock Financial division. As of December 2021, the company employed approximately 38,000 people and had 119,000 agents under contract, and has CA$1.4 trillion in assets under management and administration. Manulife at one point serviced over 26 million customers worldwide.

A mutual insurance company is an insurance company owned entirely by its policyholders. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or reduced future premiums. In contrast, a stock insurance company is owned by investors who have purchased company stock; any profits generated by a stock insurance company are distributed to the investors without necessarily benefiting the policyholders.

<span class="mw-page-title-main">Dai-ichi Life</span>

The Dai-ichi Life Insurance Company, Limited, or Dai-ichi Life for short, is the third-largest life insurer in Japan by revenue, behind Japan Post Insurance and Nippon Life.

<span class="mw-page-title-main">The Hartford</span> US-based insurance and investment company

The Hartford Financial Services Group, Inc., usually known as The Hartford, is a United States-based investment and insurance company. The Hartford is a Fortune 500 company headquartered in its namesake city of Hartford, Connecticut. It was ranked 160th in Fortune 500 in the year of 2020. The company's earnings are divided between property-and-casualty operations, group benefits and mutual funds.

<span class="mw-page-title-main">Tokio Marine HCC</span> International specialty insurance group

Tokio Marine HCC is an international specialty insurance group with offices across the United States, the United Kingdom, Spain, and Ireland. The company is based in Houston, Texas, U.S.A. but has major offices in Atlanta, Barcelona, Boston, Chicago, Dallas, Detroit, Farmington (CT), Frederick (MD), Ireland, Leicester (UK), London, Los Angeles, Madrid, Mount Kisco (NY), and New York City.

<span class="mw-page-title-main">Farmers Insurance Group</span> American insurance company

Farmers Insurance Group is an American insurer group of vehicles, homes and small businesses and also provides other insurance and financial services products. Farmers Insurance has more than 48,000 exclusive and independent agents and approximately 21,000 employees. Farmers is the trade name for three reciprocal insurers, Farmers, Fire, and Truck owned by their policyholders. The non-claims activities of Farmers are managed by an attorney in fact, Farmers Group Inc, which is a wholly owned subsidiary of Swiss-based Zurich Insurance Group.

<span class="mw-page-title-main">CNA Financial</span>

CNA Financial Corporation is a financial corporation based in Chicago, Illinois, United States. Its principal subsidiary, Continental Casualty Company (CCC), was founded in 1897. CNA, the current parent company, was incorporated in 1967.

<span class="mw-page-title-main">Grinnell Mutual</span> Mutual insurance company

Grinnell Mutual is a property-casualty mutual insurance company and reinsurer based in Grinnell, Iowa, United States.

<span class="mw-page-title-main">Hugo Kranz</span> Canadian politician

Hugo Carl Kranz was a German-born businessman and political figure in Ontario, Canada. He represented Waterloo North in the House of Commons of Canada from 1878 to 1887 as a Conservative member.

<span class="mw-page-title-main">AmTrust Financial Services</span> New York City-based multinational property and casualty insurance company

AmTrust Financial Services, Inc., is a New York City-based multinational property and casualty insurance company, offering workers’ compensation, general liability, business owners policies (BOP), cyber liability, employment practices liability (EPLI) and more. Operating through its subsidiaries, its operations are divided into three segments: small commercial business insurance, specialty risk and Extended Warranty insurance, and Specialty Middle-Market Property and Casualty insurance. The company's main regions of operations are North America, United Kingdom, and mainland Europe. AmTrust is rated “A-” (Excellent) by AM Best Company. Barry Zyskind is the chairman and CEO.

<span class="mw-page-title-main">William Schmalz</span>

William Henry Schmalz was an insurance company executive and politician in Ontario, Canada. He served as mayor of Berlin from 1911 to 1912.

Ohio Mutual Insurance Group is a group of property and casualty insurance companies based in Bucyrus, Ohio. The group is composed of three affiliates: Ohio Mutual Insurance Company, United Ohio Insurance Company and Casco Indemnity Company. As a mutual insurance company, Ohio Mutual Insurance Group is not a stock company but one that is mutually owned by its policyholders. A board of directors and an appointed president and chief executive officer manage the company.

References

  1. ↑ "Economical Insurance". Economical Insurance. Retrieved 7 May 2020.
  2. ↑ "IBC 2014 Facts" (PDF). Insurance Bureau of Canada. Archived from the original (PDF) on 6 October 2014. Retrieved 2 June 2014.
  3. ↑ "Top 25 Insurance Companies in Canada" . Retrieved 17 February 2015.
  4. ↑ "Why your home insurance is like a lottery ticket" John Greenwood | Financial Post, April 13, 2012.
  5. 1 2 3 John English; Kenneth McLaughlin (30 October 2010). Kitchener: An Illustrated History. Wilfrid Laurier Univ. Press. pp. 124–. ISBN   978-1-55458-679-0.
  6. ↑ "INDUSTRIES: Business History of Insurance". Business History. Retrieved 1 June 2014.
  7. ↑ Canadian Parliamentary Companion and Annual Register. Citizen Print. and Publishing Company. 1878. pp. 235–.
  8. ↑ "Economical reshapes acquired Hartford operation" Archived 2016-03-04 at the Wayback Machine . Canadian Underwriter. 2001-08-02
  9. ↑ Tony L. Hill (2002). Canadian Politics, Riding by Riding: An In-depth Analysis of Canada's 301 Federal Electoral Districts. Prospect Park Press. pp. 285–. ISBN   978-0-9723436-0-2.
  10. ↑ Moshe Arye Milevsky; Aaron A. Gottesman (2004). Insurance Logic: Risk Management Strategies for Canadians. Captus Press. pp. 112–. ISBN   978-1-55322-088-6.
  11. ↑ "Economical Insurance remains a Full Partner of the Broker Identity Program for 2014". Canadian Underwriter. Retrieved 1 June 2014.
  12. ↑ "Economical ‘demutualization’ coming ". Waterloo Record.
  13. ↑ "CFO leaves Economical Insurance" Tara Perkins, The Globe and Mail, Jan. 31 2011.
  14. ↑ "Board Announces Demutualization of Economical Mutual" (PDF). Demutualization Facts. Retrieved 2 June 2014.[ permanent dead link ]
  15. ↑ "Successful demutualization would help position Economical Insurance as P&C leader, company says" Archived 2014-07-01 at the Wayback Machine . Canadian Underwriter, 2014-06-24
  16. ↑ " A rough wooing of Economical Insurance", Tara Perkins. The Globe and MailJan. 20 2011.
  17. ↑ "Economical Insurance cuts 143 jobs ". Waterloo Record.
  18. ↑ Join in Our Future - Economical Insurance - We’re Transforming to Become a Public Company. Retrieved 3 March 2021
  19. ↑ "TRAINING MAGAZINE RANKS 2013 TOP 125 ORGANIZATIONS". TRAINING MAGAZINE. Retrieved 2 June 2014.
  20. ↑ "Ratings & Criteria Center". A.M. Best. Retrieved 2 June 2014.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.