Lessons for growth from mutual leaders

With growth a major challenge for many co-operative businesses, the co-operative and mutual insurance sector offers some important lessons.

With growth a major challenge for many co-operative businesses, the co-operative and mutual insurance sector offers some important lessons.

There is a growing concern about what Co-operatives UK and others have referred to as the co-operative sector’s ‘missing middle.’

A relatively small number of large, often very profitable co-operative businesses co-exist with an enormous range of micro businesses. But the number of medium sized businesses is limited.

In the UK in particular, of the 3,361 co-operatives for which turnover is known, 45 (1.3%) businesses conform to the EU definition of a large business. Approximately 70 (2.1%) are classed as medium sized businesses. The remaining 3,246 (96.6%) are small or micro businesses. 2,941 (91%) have a turnover of less than £1 million. 2,211 (66%) turnover less than £250,000.

This has given rise to important questions. What do micro, small and medium sized co-operatives need to do to grow? And what can be done at a strategic level to catalyse and support this growth?

The ICMIF global conference in Cape Town brings together co-operative and mutual insurers, some of the most successful businesses in the global sector, to discuss strategic and professional issues.

Co-operative and mutual insurers worldwide have a combined premium income of $252 billion. It is has grown by 26% since 2007, twice the speed of the global insurance market. Of the ten largest co-operatives and mutual in the world, six are in the insurance sector, with the Japanese mutual insurer, Zenkyoren, the largest mutual in the world.

Not surprisingly, given these figures, a key element of the conference has been strategies for growth, with a focused morning of sessions and discussions. There are some lessons for the co-operative sector here.

Strategic partnerships

Delegates and speakers agreed that strategic partnerships with aligned co-operatives and mutuals offer a way to expand into new markets with a good understanding of the local customers and business environment.

Luc Roger, The Director of European and International Studies at Harmonie Mutuelles, the largest health insurer in France, explained one its alliances. The insurer partnered with an Italian healthcare provider, Cesare Pozzo, to offer combined insurance and healthcare when the Italian government began its health reforms.

Both are able to provide their specialist services, with Harmonie Mutuelles benefitting from the local knowledge of its Italian partner.

Gerard Andreck, the President of the Board of another French mutual MACIF, emphasised the additional benefit of partnerships.

‘When we need to grow, inevitably we need capital, otherwise we are doomed to fail, and this will have an impact on our reputation. Sometimes you can solve your capital problems through partnerships.’

Hilde Vernaillen, the Chair of the Management Committee of Belgium’s P & V Group and CEO of its insurance arm, explains what’s at stake. ‘Rather than acquisitions,’ she says, ‘we need to find new ways to form partnerships between co-operatives and mutuals. We need to set aside our egos.’

Member engagement

Brad Hewitt, the President and CEO of Thrivet Financial in the US, emphasised the importance of engaging members in growth.

Originally a mutual insurance provider for members of the Lutheran Church, the business wanted to reach new customers. Worried that the members would see this expansion as the rejection of its principles, it engaged and listened to its members, and expanded its offer to others with a Christian faith.

It put the change to a vote amongst its members. 400,000 of its 2 million members voted in the election, with 72% voting in favour, enabling the business retain its existing customer base and expand to a new one. ‘They feel like members as they are able to participate in the process’ said Mr Hewitt.


Brad Hewitt also highlighted a third element of growth: patience. The decision to target a new market was taken over two years before any changes began.

The business started by altering its language, talking about faith and finance and replacing the word ‘Lutheran’ with ‘Christian’. Gradual it began to engage its members and consulted stakeholders until eventually a decision was needed.

Geoff Parkinson, CEO of Sunderland Marine Mutual Insurance Company’s experience was similar. ‘It’s important for companies to build up capital so you can weather the storm’ and invest in growth. ‘I can recall times that research and development has been time consuming and torturous’ he said.


Finally, speakers and delegates focused on the importance of courageous and clear leadership.

Echoing the ideas on leadership documented in ICMIF’s new member-only report, Chief Executive Insights, many saw decisive leadership based on listening and vision as fundamental for making growth happen.

Just as partnerships, engagement and patience are important, so is decision-making.  ‘There comes a point when you need to just press on. We pushed and we put pressure on our board to take a courageous act’ said Brad Hewitt.

The various strategies for growth highlighted at the ICMIF conference are certainly not the only factors, and whether they translate to different industries and businesses is a question.

But nevertheless the insights from leaders of some of the largest and most successful mutual businesses provide some useful lessons and ideas for the co-operative movement.

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