Economical Mutual Insurance Company will have a new parent company following demutualization

Newly incorporated Definity Financial files preliminary prospectus for Initial Public Offering

Waterloo, ON (Aug. 31, 2021) – Definity Financial Corporation (“Definity”) and Economical Mutual Insurance Company (“Economical Insurance”) are pleased to announce that Definity has filed with the securities regulatory authorities in each of the provinces and territories in Canada, and obtained a receipt for, a preliminary base PREP prospectus (the “Preliminary Prospectus”) for a proposed initial public offering (the “Offering”) of common shares of Definity (the “Common Shares”). The number and price of the Common Shares to be sold have not yet been determined.

The Offering is being made in connection with the conversion of Economical Insurance from a mutual insurance company to a company with share capital pursuant to the Insurance Companies Act (Canada) and regulations thereunder, a process known as “demutualization.” Definity, a newly created entity incorporated under the Insurance Companies Act (Canada), will be the parent company of Economical Insurance following the completion of the Demutualization.

BMO Capital Markets, RBC Capital Markets and Barclays are acting as global coordinators and joint bookrunners, and Scotia Capital and TD Securities Inc. are acting as joint bookrunners, for the Offering.

The Preliminary Prospectus contains important information relating to the Offering and has not yet become final for purposes of a distribution of securities to the public. No securities regulatory authority has either approved or disapproved the contents of this news release. This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or any acceptance of an offer to buy these securities in any province or territory of Canada prior to the time that a receipt for the final prospectus or other authorization is obtained from the securities regulatory authorities in each of the provinces and territories. The Preliminary Prospectus will be available under Definity’s profile on SEDAR at www.sedar.com.

The securities under the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States, except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or solicitation of an offer to buy any of these securities in any jurisdiction in which the offering or sale is not permitted.

Economical Mutual/Definity Financial files IPO and HOOPP to acquire 19.9% stake

Waterloo, ON (Aug. 31, 2021) – Definity Financial Corporation, a newly formed CBCA company incorporated under, and governed by, the Insurance Companies Act (Canada) (ICA), has filed a preliminary prospectus in connection with a proposed initial public offering (IPO) with terms to be determined and announced.

The offering is being made in connection with the conversion of Economical Mutual Insurance Company from a mutual insurance company to a company with share capital pursuant to the ICA and regulations thereunder, a process known as “demutualization”.

Definity will be the parent holding company of Economical Insurance following the completion of the demutualization. The demutualization is expected to occur immediately prior to the closing of the Offering. Following the completion of the demutualization, eligible policyholders and other specified recipients will receive financial benefits in the form of common shares, cash or a combination of both.

Definity has applied to have the common shares listed on the Toronto Stock Exchange (TSX) under the symbol “DFY.”

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 (on a non-diluted basis) immediately following the closing of the offering.

Swiss Re Investments Holding Company Ltd has agreed to purchase, concurrently with the closing of the offering, an aggregate number of common shares equal to the quotient determined by dividing the Canadian dollar equivalent of US $200 million by the offering price.

Economical Mutual Insurance Company is one of the leading P&C insurers in Canada1, with more than one million policies in force across the country. It is the seventh largest provider of P&C insurance in Canada, with a market share of 4.3%. It had approximately $3.0 billion in gross written premiums (GWP) for the 12 months ended June 30, 2021.

Economical Mutual Insurance Company has a national presence and conduct its business in all provinces and territories of Canada. Ontario is its largest market, representing 59% of GWP in 2020. It had approximately 2,700 employees in 12 regional locations across Canada as at June 30, 2021.

About Economical Insurance

Economical Mutual Insurance Company (“Economical” or “Economical Insurance,” which includes its subsidiaries where the context so requires) is a leading property and casualty insurer in Canada, with approximately $2.9 billion in annualized gross written premiums and over $6.5 billion in assets as at March 31, 2021. Economical is a Canadian-owned and operated company that services the insurance needs of more than one million customers. For more information, visit www.economical.com.

About Definity

Definity, a newly created entity incorporated under the Insurance Companies Act (Canada), will be the parent company of Economical Insurance, Family Insurance Solutions Inc., Petline Insurance Company, and Sonnet Insurance Company, following the completion of the demutualization of Economical Insurance.

Forward-Looking Statements

This news release may contain forward-looking information within the meaning of applicable securities laws, which reflects Definity’s and Economical Insurance’s current expectations regarding future events. Forward- looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Definity’s and Economical Insurance’s control, respectively. Such risks and uncertainties include, but are not limited to, failure to complete the Demutualization and the Offering and the factors discussed under “Risk Factors” in the Preliminary Prospectus. Actual results could differ materially from those projected herein. Neither Definity nor Economical Insurance undertakes any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

SOURCE: Definity Financial Corporation

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