Mutual and cooperative insurers continue to outperform the rest of the insurance market

The global mutual and cooperative insurance sector enjoyed another year of strong financial performance in 2012, according to provisional figures published by the International Cooperative and Mutual Insurance...

The global mutual and cooperative insurance sector enjoyed another year of strong financial performance in 2012, according to provisional figures published by the International Cooperative and Mutual Insurance Federation (ICMIF).

At a globe level, the mutual and cooperative sector reported record aggregate premium levels in 2012, collectively writing over USD 1.22 trillion in insurance premiums. Since the onset of the financial crisis, mutual and cooperative insurers grew their premium income by 26% between 2007 and 2012, whilst the total insurance market only increased by 11.8% during the same period. As a result, the global market share of the mutual/cooperative sector grew from 23.6% in 2007 to 26.7% in 2012, a proportional increase of 13%.

The latest figures from ICMIF form part of the Federation’s Global Mutual Market Share research, a market intelligence report on the size and performance of the global mutual and cooperative insurance industry. Published annually since 2008 alongside the Global 500, a definitive list of the largest mutual and cooperative insurers in terms of premium income, the next Global Mutual Market Share report based on data from year-end 2012 is due to be published early in 2014.

This research by ICMIF features an analysis of over 3,300 mutual and cooperative insurance companies from 80 countries around the world. ICMIF’s definition of “mutual” and “cooperative” in its research includes organizations whose structure and values reflect the mutual/cooperative form, i.e. companies which are owned by, governed by and operated in the interests of their member policyholders. Extending the definition in this way has enabled the research to include all organizations which operate on mutual/cooperative principles, without being restricted by legal definitions of which there is a wide variety across the globe and some of which are particular to one country alone.

Shaun Tarbuck, ICMIF Chief Executive, suggests that greater levels of trust and customer satisfaction associated with mutual and cooperative insurers has given them a competitive advantage against shareholder-owned insurers. “Our analytical research says that the mutual and cooperative sector has been the fastest-growing part of the global insurance industry since 2007. We are, I feel, at the cutting edge of the insurance industry – and certainly the recent growth in market share of the sector suggests that the public is beginning to recognise this as well.  When a cooperative/mutual insurer creates member value it, in turn, fosters competitive advantage and ultimately increases market share. All the statistics collated by ICMIF’s research team tell the same story: we’ve earned the right to call ourselves strong.”

ICMIF’s research finds that consistent growth in life business by mutual and cooperative insurers contributed most significantly to the overall increase in their share of the global market, as life market share increased from 20.8% in 2007 to 24.9% in 2012. However, mutual and cooperatives hold a higher share of the total non-life insurance market, with a global market share of 29.3% in 2012 (up from 27.7% in 2007).

Regionally, the mutual and cooperative sector in all five regions covered in the Mutual Market Share report outperformed their total regional market between 2007 and 2012, resulting in a considerable increase in mutual/cooperative market share. In Europe, the mutual/cooperative share of the total market increased year-on-year since 2007 (up to 28% in 2012 from 22.6%), while the North American mutual/cooperative sector held a third (33%) of the total regional market in 2012 (an increase from 28.5% in 2007). Latin American mutual and cooperative insurers posted double-digit premium growth year-on-year between 2008 and 2012, and outperformed the total insurance market in four of the last five years, resulting in regional market share increase from 8.6% in 2007 to 11.0% in 2012.

The latest data released by ICMIF comes at a time when other research has identified the insurance sector as one of most important sectors in the global cooperative economy. The second edition of the World Co-operative Monitor report was launched at the recent International Co-operative Alliance (ICA) Conference in Cape Town, with the total turnover of the largest 300 global cooperative and mutual organizations estimated at USD 2.1 trillion. Just under half of this turnover was generated by the mutual/cooperative insurance sector, as 41% of the largest 300 organizations were insurance cooperatives or mutual insurance companies.

Mr Tarbuck reiterated the findings from this global research on the mutual and cooperative movement adding: “We’ve a lot to offer in a world which, for many, seems to be becoming ever more hazardous. People need insurance which is really tailored to their needs – not sold to them simply to boost the end of year profits for shareholders.”


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