Echelon parent merger complete, Co-operators stake further reduced

The amalgamation of EGI Financial Holdings Inc. (EGI), parent company of Echelon General Insurance Co., with Canadian Insurance Marketing Inc. CIMI) is now complete. With the merger, The Co-operators Group has also reduced its stake in EGI to 43% – Co-operators previously held 50% of EGI, while CIMI held the other 50%.
In 2001, Co-operators sold 50% of its stake in Echelon to EGI, and then last January it was announced that EGI and CIMI would join, with former EGI shareholders owning about 35% of CIMI. Beyond The Co-operators’ stake, the remaining 57% of the amalgamated EGI is now owned by management, employees and outside investors.
With the latest news, the new independent company will operate under the EGI name to pursue expansion. No changes will be made to operating management, says CEO Douglas E. McIntyre, but the company will be looking to increase its business, specifically through expansion into the U.S.
“We now have all of the human, financial and corporate resources necessary to fully develop Echelon General’s potential as a focused niche insurer, offering both non-standard automobile and other specialty lines of business”, says McIntyre.
Echelon is involved in a variety of non-standard markets, including warranty, high-risk property, casualty and accident & health, as well as rent-a-captive and fronting services.
The Co-operators Group CEO Kathy Bardswick says that while her company is reducing its stake in Echelon, it remains a significant shareholder and distribution channel for the company. “We know from past industry experience that niche and specialty insurers are most effectively developed as independent, entrepreneurially-driven companies, rather than as special risk departments within large multi-line insurance groups.”