Pafco team back in business with Co-operators

Co-operators General Insurance Co. has sold around half of its stakeholding in wholly-owned specialty auto risk insurer Echelon General Insurance Co. to a group of former senior executives of Pafco Insurance Co. who left the company after it was taken over by Allstate Insurance Co. of Canada in 1998.

The exact shareholding acquired in Echelon by the group of directors through their holding company, EGI Investments Inc., has not been disclosed, nor the value of the deal. However, based on last year’s financial return, Echelon held about $36 million in annual revenue. A statement released by Co-operators says that, following closure of the deal, Echelon will have total assets of over $100 million and regulatory capital of $20 million. “We believe that by joining forces with EGI the re-organized Echelon can offer the best non-standard automobile insurance expertise available in Canada and create a much larger and profitable company,” says Co-operators president Terry Squire.

Co-operators believes that a “market gap” has opened up Canadian non-standard auto following the demise of Progressive Casualty Insurance Co. of Canada, and the recent restructuring of the Queensway group. EGI Investments chairman Bob Barnett says Echelon will be focusing on making money and not chasing business volume.