Global reinsurer Swiss Re is set to invest USD 200 million in a new parent company called Definity, which prior to the closing of its initial public offering (IPO) will oversee Economical Insurance following the completion of its demutualization, according to reports.
Definity Financial Corporation is a newly-created entity incorporated under the Insurance Companies Act, and will serve as the parent company to Economical Insurance, Family Insurance Solutions, Inc., Petline Insurance Company, and Sonnet Insurance Company, reports The Record.
Definity has filed a preliminary prospectus in connection with a proposed IPO with terms to be determined and announced.
Reports on the matter explain that the offering is being made in connection with the conversion of Economical Mutual Insurance Company from a mutual company to a company with share capital, a process known as demutualization.
Once the demutualization is finalised, which will take place immediately prior to the closing of the offering, Definity will serve as Economical Insurance’s parent company.
Definity has applied to have its common shares listed on the Toronto Stock Exchange under the symbol DFY.
The Record reports that, concurrent with the closing of the offering, Swiss Re Investment Holdings Company Ltd has agreed to acquire an aggregate number of common shares equal to the quotient determined by dividing the Canadian dollar equivalent of USD 200 million by the offering price.
Additionally, Healthcare of Ontario Pension Plan (HOOPP) has agreed to purchase, concurrently with the closing of the offering, an aggregate number of common shares that will be equal to 19.9% of the issued and outstanding common shares immediately following the close of the offering.
Swiss Re already has a relationship with Canada’s Economical Insurance through its commercial insurance unit, Swiss Re Corporate Solutions.