Mutual and cooperative insurers have long prioritised social impact over financial gains, focusing on serving their members and communities. For these organisations, purpose is not just a guiding principle but a strategic investment in long-term success.

Aligning purpose with business operations can create shared value. Purpose-driven efforts may not yield immediate financial returns but often pay dividends over time, strengthening organisations while uplifting local communities.

Measuring purpose as a strategic investment

As purpose increasingly becomes a defining feature of successful businesses, it also raises the challenge of measuring its impact. Unlike profits, societal value is harder to quantify.
Developing innovative methods can address this, such as tracking customer resilience, monitoring sustainable investment portfolios, and evaluating employee alignment with purpose-related goals. While quantitative metrics like funds raised and policies issued offer some insight, there is an importance of evaluating qualitative outcomes, such as how lives are transformed and communities become more resilient.

Purpose-driven organisations see societal impact as an integral part of their mission, not a separate agenda. This focus not only fulfils their foundational values, but also establishes trust and loyalty among members and stakeholders.

Navigating rising costs with affordability and innovation

Economic pressures such as inflation and rising costs have created significant challenges for businesses trying to balance financial stability with affordability for their clients. However, while financial sustainability is necessary for survival, purpose remains the “north star” guiding these efforts.

Mutual and cooperatives are seeking to address these tensions through creative and collaborative solutions. Models like co-insurance and shared reinsurance are used to manage emerging risks. This pooling of resources enables organisations to offer reasonably priced coverage to their member-policyholders, despite increasing environmental challenges.

Organisations are also looking to redesign some of their products to address affordability. By adjusting features and working closely with clients to co-create solutions, organisations have been able to maintain accessibility while upholding their mission.

This balancing act underscores the unique advantage of mutuals and cooperatives. Their priority is not maximising profits but ensuring that members and communities are supported, even in times of economic hardship.

The importance of leadership and collaboration

Effective leadership is a central theme to ensure a profitable, purpose-driven business.

Embedding purpose throughout an organisation goes beyond setting goals—it involves actively communicating and exemplifying the organisation’s mission.

Language used by leaders can reflects and reinforces purpose. Replacing profit-centric terms like “share of wallet” with customer-focused goals such as resilience aligns employee efforts with the company’s mission. Purpose must be lived at every level within an organisation, starting with top management. When leaders embody these values, employees and clients naturally align with the organisation’s vision.

Collaboration and innovation are also as essential for sustaining purpose-driven impact. Advancements in technology, such as IoT-based loss prevention tools, offer mutuals new opportunities to minimise risks and enhance resilience.

Within the mutual insurance sector, “collaborating with purpose” enables organisations to share resources, exchange knowledge, and build collective strength. This cooperative approach not only addresses immediate challenges but also ensures the sector’s long-term sustainability.

Profitability as a means to purpose

For many mutuals and cooperatives, profit is not an end in itself but a means to sustain and grow their mission. Organisations set profit targets not to maximise gains but to build reserves, reinvest in their communities, and ensure financial resilience.

Different organizations have varying benchmarks for profitability, such as aiming for a 5% profit margin, using the surplus to support future risks and develop new initiatives; or purposefully operating with higher combined ratios than stock company counterparts, reflecting a focus on purpose rather than short-term financial gains.

A long-term perspective is critical for balancing profitability with purpose. In some emerging markets, where mutuals are newer, breaking-even is often the first milestone, followed by reinvestment into cooperative development. Profitability naturally follows when organisations stay true to their mission.

Many purpose-driven organisations derive a strategic advantage from their alignment with community values. By prioritising inclusivity, sustainability, and member welfare, these businesses build lasting trust and loyalty, can earn goodwill from both customers and intermediaries, further reinforcing the value of purpose.

Profitability and purpose are not opposing forces but complementary elements of a sustainable business model. By staying true to their mission, mutual and cooperative insurers can navigate challenges, foster resilience, and create meaningful impact for their communities and build a foundation for long-term success.

Session panellists:

• Barry O’Dwyer, Group CEO, Royal London (UK)
• Ylva Wessén, President and CEO, Folksam (Sweden)
• Diego Guaita, CEO, Grupo San Cristóbal (Argentina)
• Patrick Nyaga, Group Managing Director & CEO, CIC Insurance Group (Kenya)
• Matt Mosher, President and CEO, AM Best (USA) moderator