15 June 2018

Commercial Risk Europe: Study highlights resurgence of Europe’s mutual and cooperative insurance sector

Europe’s mutual and cooperative insurers have seen a resurgence in business in recent years, according to a study jointly published by the Association of Mutual Insurers and Insurance Co-operatives in Europe (AMICE), and the International Cooperative and Mutual Insurance Federation (ICMIF).

The study covers the 28 member states of the EU, plus the four countries which are members of the European Free Trade Association. It reveals that the period between 2007 and 2015 witnessed a renewed interest from members and policyholders in mutual and cooperative insurance, turning the trend from the previous edition of the report, published in 2012, covering the years 2004-2008.

In that period, the mutual and cooperative model had somewhat fallen out of favour, being perceived as anachronous in the prevailing business environment of the time, says the report. “Demutualisations and other legal form changes, as well as M&A and other consolidation activity, had reduced the number of mutual and cooperative insurers in Europe and led to a decrease in market share,” it reveals. “This trend subsequently and significantly reversed with the onset of the global financial crisis. European mutual and cooperative insurers reported premium income increases at a much higher rate than the rest of the European insurance market in the period [2007 and 2015], reflecting a flight to quality and security in the face of profound economic instability.”

“This in-depth study demonstrates the renewed interest of policyholders in the security afforded to them by mutual and co-operative insurers, reflecting the unique relationship between mutuals and their members and policyholders,” said Grzegorz Buczkowski, president of AMICE. “It also shows, though, that there is very uneven recognition of the legal form of mutual and cooperative insurers across Europe. This ultimately leads to unequal treatment in different European member states, to the detriment of some policyholders.”

AMICE secretary general Sarah Goddard said: “The fundamental distinguishing feature of mutual and cooperative insurers, setting them apart from listed insurance companies, is that they operate for the benefit of their members and policyholders rather than for the benefit of external investors. One consequence of this is that mutual and cooperative insurers have a stronger focus on the longer-term time horizon than their listed counterparts, notably in respect to their relationship with members and policyholders. This also manifests itself in many mutual and cooperative insurers’ approach towards products and claims, socioeconomic responsibilities, democratic governance and sustainability.”

She continued: “Whether the upwards trends identified in this report will continue remain to be seen. There are significant changes taking place in the wider European insurance industry, as well as new competition developing from technological innovation. The flexibility of mutual and cooperative insurers to respond to external factors and of regulators to recognise their unique features will play a large part in their future success.”

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