The board of directors of Waterloo, Ont.-based Economical Insurance announced on Friday that Karen Gavan will retire as president and CEO and director at the end of her contract on Dec. 31, 2016.
The board of directors will conduct a process to select Gavan’s successor. She will continue to lead the company during this phase.
Gavan (pictured left) joined the board of Economical Insurance in 2008 and assumed the role of president and CEO in 2011, Economical said in a press release. As initial chair of the special committee on demutualization, she spearheaded the decision to proceed with demutualization and then as CEO, she successfully led the company through a period of transformational change. “Under Gavan’s leadership, the company has established a bold vision and strategy, grown significantly, transformed its operating platform, and positioned itself as a strong competitor,” Economical said in the release.
“Economical Insurance is entering the next stage in our journey to becoming a public company,” Economical board chair John Bowey said, adding that “we do so from a position of strength thanks to Karen’s exceptional leadership. Now is the right time for transition.”
Gavan said in the release that “it has been a privilege to lead Economical at such an exciting time in its history. Economical is now well positioned for the future,” she said, adding that she remains “committed to providing ongoing leadership for the company until the end of my contract.”
Related: Economical demutualization committee chairman Bowey becomes chair of the board
During Gavan’s tenure to date as CEO — from the second quarter of 2011 through the end of 2015 — total equity has grown by more than $500 million to record levels, with the company surpassing $2 billion in gross written premiums for the first time in its 145-year history, Economical said.
In addition to financial performance, Economical achieved notable success in areas of strategic importance under Gavan’s leadership. During this period, the company:
• Formally began its demutualization process;
• Implemented a business transformation program that reduced operating expenses to competitive levels;
• Developed a multi-channel strategy and announced the launch of a direct-to-consumer business, scheduled for later in 2016; and
• Made significant investments in technology and predictive analytics, including a multi-year implementation of its Guidewire PolicyCenter policy administration system.
“Economical would not be where it is today without Karen’s vision and drive,” continued Bowey (pictured right). “We have incredible momentum. Our board remains fully committed to our strategy, and our next CEO will share in our excitement and vision as we continue to expand.”
Founded in 1871, Economical had approximately $2 billion in annualized premium volume and $5.3 billion in assets as of Dec.31, 2015. The Canadian-owned and operated company services the insurance needs of more than one million customers across the country and conducts business under the following brands: Economical Insurance, Economical, Western General, Economical Select, Perth Insurance, Family Insurance Solutions and Economical Financial.