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Definity Financial Corp. is looking to raise $1.25-billion in an initial public offering as it nears the end of a years-long process to transform Economical Mutual Insurance Co. from a mutual owned by policyholders to a publicly traded company.

The Waterloo, Ont.-based insurer will price its shares in a range of $19 to $22 each and will be listed under the symbol “DFY” on the Toronto Stock Exchange, according to a company statement. Definity is a subsidiary created to take Economical Insurance public, and will become the insurer’s parent company after the public offering.

The 150-year-old company’s bid to go public began nine years ago and reached a key milestone in May when policyholders voted overwhelmingly to demutualize at a special meeting. It is Canada’s seventh-largest property and casualty (P&C) insurance provider, with market share of 4.6 per cent, according to a recent company filing.

Chief executive officer Rowan Saunders has previously said he has ambitions to climb into the top five, in part through potential acquisitions and expansion outside Ontario, and has suggested that accessing capital in the public markets would help position Definity to compete against multinational companies as well as leading domestic insurers.

Canada’s P&C insurance industry has been consolidating over the past decade, as several foreign-owned insurers sold their Canadian operations to domestic companies. That has created a concentration of larger players, most of which have already demutualized – a process that converts the ownership stakes held by participating policyholders in a mutual insurance company into share ownership.

Once demutualization is complete, Definity will be the parent company of Economical Insurance and its subsidiaries Family Insurance Solutions Inc. and Petline Insurance Co., as well as fast-growing online provider Sonnet Insurance Co. Finance Minister Chrystia Freeland has approved the conversion plan.

In 2019, the insurer received a potential IPO valuation of $1.9-billion for an anticipated public offering this year.

The lead underwriters on the deal are BMO Nesbitt Burns Inc., RBC Dominion Securities Inc. and Barclays PLC, backed by a syndicate that also includes Canada’s four other major banks. Definity expects to give the underwriters an option to buy a number of shares equal to 15 per cent of common shares for up to 30 days after the closing date.

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