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‘No desire’ for this insurer to demutualize


September 4, 2018   by Greg Meckbach


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Two months after Economical Insurance submitted its demutualization proposal to the federal government, another federally-regulated mutual has all but completely ruled out demutualization.

There is “no desire” for demutualization at Heartland Farm Mutual Inc., Louis Durocher, Heartland’s new president and CEO, confirmed in an interview. He did not go so far as to say the firm would never demutualize. “I think we are happy to have the roots that we have and to stay a company that is a mutual.”

Durocher joined Waterloo, Ont.-based Heartland in July after serving as chief risk officer for Aviva Canada.

Heartland was formed in 2016 from the merger of Waterloo-based North Waterloo Farmers Mutual Insurance Company and Oxford Mutual Insurance Company, based in Thamesford, Ont., about 15 kilometres east of London International Airport.

Heartland is one of seven federally-regulated property and casualty mutual insurers. In 2015, the federal government passed regulations allowing federally-regulated property and casualty mutual insurers to demutualize.

Don’t expect Heartland to be one of them any time soon.

At Heartland, demutualization is “not something that’s being talked about here by brokers, customers or the board,” Durocher told Canadian Underwriter Aug. 30. “I can’t say I was asked the question personally. I think we are happy to have the roots that we have and to stay a company that is a mutual. That’s part of our roots, that’s part of our culture and there is no desire to change this any time soon, I would say.”

So far, the only mutual insurer to take the first step toward demutualization has been Waterloo, Ont.-based Economical, which submitted this past June to the Office of the Superintendent of Financial Institutions, a proposal to convert to a stock company.

Economical’s mutual policyholders voted to demutualize in late 2015, shortly after the board of directors recommended it. At Economical, the company is owned by its mutual policyholders, of which there are fewer than 1,000. The vast majority of Economical customers are non-mutual policyholders.

Manitoba-based Wawanesa Mutual Insurance Company has “no plans to demutualize,” Wawanesa CEO Jeff Goy told Canadian Underwriter earlier.

The same goes for Gore Mutual, Gore CEO Heidi Sevcik noted in 2017 at the Insurance Brokers Association of Ontario’s annual CEO panel.

Other federally-regulated P&C mutuals include Portage La Prairie, The Kings and Saskatchewan Mutual.