Hartford buy boosts Economical prospects

The Economical Insurance Group’s purchase of Hartford Insurance Co. of Canada should allow the Waterloo-based insurer to expand its U.S. presence, says vice president of marketing and distribution Tom Reikman. The sale, for which financial terms have not been disclosed, brings in about $35 million in premium to Economical. It also opens up a road for the insurer to the U.S. commercial market, “an area we have been limited in”, Reikman admits. “Hartford will be providing access to us as our U.S. partner.” The company is targeting Canadian-based businesses with U.S. branches, as well as the workers compensation market.

Economical was actively looking for acquisition opportunities to enhance its commercial business, which currently brings in about $220 million, according to Reikman. Hartford was approached directly about selling its operations which, he says, are along similar lines to Economical’s small and mid-size commercial offerings. Hartford’s operations also include some affinity, marine and surety business. The technology to support these operations also suited Economical. Acquiring existing operations was seen as the best route for growing the company’s business, “to position ourselves among the top commercial players”, he comments.

Economical will retain all of Hartford Canada’s 70 employees, who will continue to work from their current Toronto location for the time being. Policies will continue to be issued under the Hartford name until mid-2001, when they will be renewed by Economical.

The sale, subject to regulatory approval, is expected to be finalized in the first quarter of 2001. It does not include the Canadian operations of Hartford Life, Hart Re, Hartford Specialty, international agriculture or the commercial book of business derived from Canadian operations of U.S. customers.