U.S. insurer shares entry plan for Canadian affluent home, auto markets

Clear market demand was behind U.S. carrier PURE Insurance’s entry into the Canadian affluent homeowners’ insurance market and plans to enter the auto insurance space next year, the head of the insurer’s Canadian branch told Canadian Underwriter in an interview Tuesday.

“From a broker perspective, what we hear from our brokers is there’s definitely a need for another carrier, and there’s also clear demand for a real specialist,” said Chris Sevdalis, head of PURE’s Canada branch. “And so, we’re really excited to get going into Canada.”

Privilege Underwriters Reciprocal Exchange (PURE) announced Monday its first international expansion outside of the U.S. with the launch of a Toronto office that will begin offering home insurance policies to Ontario residents this month. The product is for high-net-worth homeowners whose properties are worth between $2 million and $100 million.

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

The insurer 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.

Regarding its Canadian expansion, CU asked PURE if it was looking to expand into certain provinces.

“Ultimately, we want to be able to serve the membership in Canada anywhere that they have a need,” Sevdalis says. “So over time, we will definitely nationalize the program.

“We’re starting in Ontario for homes, valuables, liability and watercraft,” he continued. “We’re going to be introducing the Ontario auto product, probably [in] the front half of 2025.”

All eyes on B.C.

As the insurer expands outside Ontario, B.C. will likely be the next province later in 2025, followed by other provinces, Sevdalis says. “We will introduce the entire product suite in B.C.,” he says, acknowledging it will be a little different given the public auto regime in the province.

“We’re going to take a very slow and careful approach to expansion.”

PURE is a policyholder-owned reciprocal P&C insurer operating through select brokers. While many insurers offer coverage for certain types of water damage, such as overland flood, as an optional add-on, “PURE’s homeowners policy automatically includes this coverage, making the claims experience far more straightforward,” the insurer says in its release.

When members join the 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 premiums pays third-party claims and expenses; any underwriting profits are returned to the membership through subscriber savings accounts.

“We see a great opportunity in Canada for our expertise,” Sevdalis says, citing the insurer’s unique structure. “It’s a fresh approach, and Canada will help us grow the membership.”

Both home and auto markets in Canada have faced numerous challenges over the years ranging from rising premiums, more frequent and severe catastrophes, increased claims costs and auto theft.

“I think the challenges are national and there are similar challenges in the U.S. with respect to higher claims cost,” Sevdalis says. “Our prices will reflect the individual risk, and by attracting responsible drivers who prioritize safety on the roads, we think we can reward them with fair and competitive prices.”

PURE executives spent the past two years preparing its products for the Canadian marketplace.

“We had to assess the market, understand what the opportunities were, the inefficiencies of the Canadian market, and how we could help improve things for Canadian high-net-worth insurance consumers.”

The insurer then went through the regulatory process at the federal (Office of the Superintendent of Financial Institutions) and provincial levels.

As it prepares to enter the auto market, PURE will further review the product, Sevdalis adds. “We’ve launched the company in Ontario, and we’re just really excited.”

Feature image by iStock.com/sheilasay