Ohio National Demutualization

In today's BetterWealth episode, Dan and I discuss Ohio National's decision to go from a mutual company to a stock company which is called a demutualization process. We talk about the pros and cons, as well as, discuss the details we have given to date.  

What is happening?

• If approved, Ohio National will demutualize and become a stock-owned subsidiary of the Canadian company Constellation Insurance Holdings, Inc. 
• Constellation will purchase Ohio National in its entirety for $1 Billion. 
• $500 million will go to Ohio National participating policyholders to buy out their ownership interest in the company
• The remaining $500 million will be for strategic business purposes
• The proposed transition requires regulatory and policy holder approval
• The ultra-low interest rate environment is something these 100+ year old companies haven’t faced at length before
• Large old companies are generally slow to adapt to new trends
• New technology-driven companies are increasing competition
• The recent announcement suggests that this transaction will strengthen the company’s financial position, enhance its market position, and give it the necessary resources to facilitate future growth. 

**This does not mean other mutual companies are headed in the same direction.

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