Canadian Underwriter

Ontario policyholders approve merger to create Heartland Farm Mutual Insurance

August 28, 2015   by Canadian Underwriter

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North Waterloo Farmers Mutual Insurance Company (NWFM) and Oxford Mutual Insurance Company announced on Friday that their mutual policyholders have voted overwhelmingly to approve the amalgamation of the two companies to create Heartland Farm Mutual Insurance Inc.

Carlos Rodrigues will be Heartland’s president and chief executive officer, positions he currently holds at NWFM

At separate meetings on Thursday, “well over the required two-thirds of the voting mutual policyholders of both companies indicated their support for the amalgamation,” originally announced in March, Heartland said in a press release.

Carlos Rodrigues will be Heartland’s president and chief executive officer, positions he currently holds at NWFM.

The merger remains subject to the approval of the federal Minister of Finance acting on the recommendation of the Office of the Superintendent of Financial Institutions. With that approval, Heartland will offer farm, home, auto and commercial insurance across Ontario through brokers and its own agents.

The newly created farm insurance company will have written premiums approaching $105 million, the release said, with an underlying capital base of approximately $79 million. Heartland’s head office will be in Waterloo, with Oxford’s current office in Thamesford “continuing to have significance as a regional centre,” the release said.

“Through this merger, we are creating a much stronger mutual property and casualty insurance company that will continue to compete in an increasingly challenging industry,” said Helen Johns, chair of NWFM, in the release. “Heartland will be able to invest, especially in the technology that is changing the business, and add new products and services for brokers, agents and policyholders.”

Johns went on say: “We will be able to improve our spread of risk, enhance operating efficiency and deliver stronger financial results. Added financial strength means Heartland will be able to provide greater security and stability to stakeholders.”

Related: North Waterloo Farmers Mutual agrees to merge with Oxford Mutual Insurance

Heartland plans no reduction in the number of employees at the two predecessor companies but expects to reduce its expense ratio through synergies and greater economies of scale, the release said. All existing policies of both companies will remain in force as Heartland mutual policies and policyholders will continue to be served by their current brokers or agents.

“This has been a long and carefully considered process from the initial strategic reviews by both companies, to the amalgamation agreement, and now to policyholder approval,” added Moira Connell, chair of Oxford. “The directors and management agree this is the best way forward for everyone. The operations of the two companies fit well together, but we also share values. We are committed to customer service, the concept of mutual insurance, and giving back to our communities.”

Rodrigues noted that important steps in the integration of the operations are already under way and there is excellent cooperation between the people at each company. “We are confident we can achieve the potential promised by this merger, strengthening our service and product offering with no disruption to our broker and customer relationships,” he said.

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