Economical takes Family’s BC stake

Economical Mutual Insurance Company has announced plans to purchase the insurance-related assets of the Family Group of Companies, which filed for bankruptcy protection in British Columbia earlier this year. Swiss Reinsurance Company, a Family creditor, joins Economical and will receive its minority equity interest to partially off-set the $20 million owed to them by Family. According to Economical president Noel Walpole, the transaction has just received court authorization — as Family’s assets are controlled by the Companies Creditors Arrangement Act (CCAA) — and the two companies are in the process of closing the deal.

Walpole estimates Family’s premium total to be roughly $38 million in British Columbia, boosting Economical’s BC presence, currently estimated to be around $10 million. He insists the companies will continue to be run separately, as Family Insurance Inc. will have more than one shareholder.

The move comes on the heels of ING Canada’s recent announcement of its intentions to acquire British Columbia Automobile Association’s insurance operations. The deal, announced in January, adds $34.9 million in direct written premiums to ING Canada subsidiary Western Union’s coffers. Walpole insists one-upmanship played no part in the Family transaction. “This is purely to increase our marketshare position. There is absolutely no relationship between our move and ING’s attempts to acquire BCAA,” he insists.