Weighing up the ethical options for insuring your co-op

Insurance is a necessary part of any business. Researching insurance providers is never going to be on your top ten list of enjoyable activities, so it can be tempting...

Insurance is a necessary part of any business. Researching insurance providers is never going to be on your top ten list of enjoyable activities, so it can be tempting to go with whatever deal you’re offered. But you may have important ethical considerations.

The Your Ethical Money website provides ethical ratings for most of the larger insurance providers. While the ratings are based on personal insurance, many of the providers listed do offer business cover. Ethical Consumer also ranks insurance companies by their ethical performance – although, again, the focus is on personal insurance.

One of the difficulties is that insurance cover may well be provided by a different business than the one you buy it from.

For example, the only UK-based insurance co-operative is Co-operative Insurance – but the business insurance it sells is actually provided by Aviva.

For many co-ops, the most obvious place to turn will be a mutual, which, by their very nature, can be seen as a more ethical choice.

“A mutual’s owners are its customers,” says Martin Shaw, chief executive of the Association of Financial Mutuals (AFM). “There are no overseas investors, or institutional investors whose activities you might not agree with, or who might prioritise short-term gains over long-term values.

“In the case of a UK-based insurer, it also means that the mutual is UK-owned – so it’s better placed to make decisions about how it can support local communities, for example.”

A mutual’s main responsibility is to its customers/owners, which usually translates to better service.

Martin says: “One of our members is LV=, which has found that the root cause of its customers’ high levels of satisfaction is its mutual values.

“Surveys show that customers of mutual insurers are more satisfied with their service than customers of plcs. Mutuals have fewer complaints to the Ombudsman, and higher levels of trust.”

There are around 30 million members/policyholders of mutual insurers in the UK, and the market is growing; there was an overall premium growth of 39% between 2007 and 2014, compared with a sector-wide decrease of 20%.

In the Market InSights UK 2014 report, Mike Rogers, chair of AFM and group chief executive of LV=, says: “Not only did people see the sector as a ‘safe pair of hands’ during the crisis, but their confidence continues, and mutuals are well placed to drive growth in UK insurance.”

There are approximately 100 mutual insurers in the UK.

NFU Mutual provides a wide range of business and farming cover, including to many farmer co-ops.

It has won several awards for customer service, including the Which? Award for Best Insurance Services Provider 2015 and Moneywise’s Most Trusted Insurer 2015. Employees are given one day off a year to volunteer for the National Trust, and The NFU Mutual Charitable Trust provides donations and grants to charitable initiatives connected with agriculture, the countryside, farming education and the insurance industry.

The mutual is committed to reducing its environmental impact, which has led to impressive energy reduction measures.


Naturesave_Insurance_logoOne insurance broker that may be of interest to environmentally minded co-ops is Naturesave. While not a mutual, it has been awarded the Queen’s Award for Enterprise in the Sustainable Development category, and 10% of selected premiums is used to support environmental projects, including many community-owned renewable energy initiatives. Ethics are firmly embedded, from choosing recycled or FSC-certified office furniture, to using renewable energy and offsetting remaining carbon.

All business customers are offered a free environmental performance review and, if they act on the suggestions, they can receive a reduction in their premium.

Naturesave predominately works with ‘greener’ insurers, and offers a wide range of policies, including ones designed for renewable energy organisations, wholefood shops and transition groups. Customers include well-known green companies, organisations and charities.

CEO Matthew Criddle says: “Our customers want to deal with an organisation that’s going in the right direction – that marries up with their values. They’re intelligent, altruistic people, so they make good clients!”

One solution for co-ops seeking ethical insurance is to work together. “Several fire and rescue services have come together to set up their own insurance company, managed by Regis Mutual Management,” says Martin Shaw. “As it’s been set up by people within the industry it’s serving, values and ethics can be embedded from the outset.”

  • Please note that the information provided is not, and should not be treated as, any form of financial advice or recommendation.
  • This focus on ethical finance is authored by Co-operative News with support from Ecology Building Society. Ecology provides mortgages for environmentally friendly properties, community enterprises and co-operatives, funded through its simple, ethical savings accounts.
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