U.S. insurer enters Canada with affluent homeowners’ insurance, to offer auto in 2025

U.S. property and casualty insurer PURE Insurance has expanded into Canada with home insurance for affluent homeowners whose properties are worth between $2 million and $100 million.

Privilege Underwriters Reciprocal Exchange (PURE) announced its first international expansion outside of the U.S. on Monday with the launch of a Toronto office that will begin offering home insurance policies to Ontario residents this month, PURE said on its website, quoting a Globe and Mail article.

The company will also introduce auto insurance for the province in early 2025, “with planned expansion to other provinces in the future,” the insurer says in a press release. “This move introduces PURE’s unique reciprocal model to high-net-worth Canadians, starting in Ontario.”

PURE is a policyholder-owned reciprocal P&C insurer operating through select brokers. “This member-owned model incentivizes PURE to charge the right price, not the highest, and to deliver exceptional solutions and service to members.”

For example, many insurers offer coverage for certain types of water damage, such as overland flood, as an optional add-on, “which can lead to gaps in coverage and make the claims process difficult,” PURE says. “PURE’s homeowners policy automatically includes this coverage, making the claims experience far more straightforward.”

When members join a reciprocal, they sign a subscriber’s agreement that assigns a third party to manage the business on their behalf. In PURE’s case, the third party is PURE Risk Management, a company owned by Tokio Marine. A percentage of the member’s yearly premium pays the third party claims and expenses. Any underwriting profits are returned to the membership through subscriber savings accounts.

Canadian Underwriter contacted PURE for comment on its Canadian expansion and more details about its home and auto products and will publish a second story soon.

Chris Sevdalis, head of PURE’s Canadian branch, told Globe and Mail Canadians worth $20 million to $50 million would need a policy with about $25 million of excess personal liability, compared to only about $2 million to $5 million in standard policies.

 

Cross-border benefits

The insurer says the home insurance product also allows it to serve members with homes in Canada and the U.S.

“Canadian members who own properties or assets in the U.S. will benefit from an established presence in the U.S. market,” Sevdalis told Globe and Mail in an interview. “What’s really important is that we can offer them a seamless insurance experience across the borders. It’s the same claims-reporting process regardless of where risk is located.”

PURE has operated in all 50 U.S. states in the high-net-worth space for almost 20 years. It offers coverage for high-value homes, automobiles, collections, watercraft, personal excess liability, fraud, cyber and flood to more than 100,000 members.

In Canada, the cost of homeownership has been challenging, and a housing affordability crisis has dragged on for years. Various factors have also contributed to rising home insurance premiums, including more frequent and severe catastrophes for years on end. (Canada experienced four large Cats this summer.)

Rate comparison site MyChoice Financial reported in March that Canadian home insurance policyholders should brace for price increases this year following a 7.66% year-over-year rate increase since the beginning of the year. This was in line with what Applied Systems reported last year, when Canadian home insurance premiums saw a 7.5% average rate increase year-over-year.

Likewise, the auto insurance market in Canada has faced challenges with increased claims costs and a rate cap in Alberta. In Ontario in particular, auto theft has been an issue in recent years. Although preliminary indications are that auto theft decreased this year across Canada, insurers still paid out $1.5 billion last year and $1.2 billion in 2022.

 

Feature image by iStock.com/jgareri