Ben Telfer:
Hello everyone and welcome to today’s ICMIF webinar, “Creating growth through a purpose-led strategy: Key principles of differentiation for mutual insurers.” Today, we’re glad to be joined by ICMIF support member, EY, who will be sharing the main findings from their research on the EY Global Mutual Market Scan and sharing the four key principles of mutuality that came out of their global research.

I’m very pleased to introduce from EY, Puneet Chattree who is the EY Global Insurance Mutual Network Leader and also Jennifer Baziuk, who is the Associate Partner in the Insurance Strategy and Business Transformation division of EY. Puneet, Jen, glad you can join us today and Puneet, I think I’m handing over to you first.

Puneet Chattree:
Excellent. Thanks very much Ben. And thank you to you al the ICMIF members for your attendance. We’re really happy to be here and as Ben mentioned, I’m Puneet Chatree. I lead our Global Mutual Network and when we reflect on where we are at this moment in time, this is really such an exciting topic for Jen and I to be part of right now. We think about mutuals and we think about the role that mutuals are playing in our insurance sector across the globe and really this is a moment in time where they serve as a catalyst and an opportunity for us to really accelerate how we think about purpose and how we think about using our purpose to lead the way in which we grow, the way in which we differentiate in the market and the way in which we engage with our consumers. And that’s what really today is about.

What we’d like to do today is really walk you through a study that we did as EY, looking at sort of what are the key principles of differentiation for mutuals across the market. And if we think about just where we were and sort of what our approach was to do that, we conducted an extensive scan of the global insurance sector between 2019 and 2020 to understand really what sets mutuals and cooperative insurers apart from stock carriers, and how do we drive and operationalize a purpose-led strategy to differentiate and accelerate growth?

So we looked at 10 regions within the mature mutual insurance market share and over 50 mutual case studies globally that we analyzed where we spoke to our EY account teams to the executives sitting within mutuals to really understand how do they see the opportunity to drive greater purpose in the way that they’re going to market, to really differentiate themselves in the way that they’re looking to engage with their consumers, the way they engage with their employees and their brokers and intermediaries and the way in which we are looking to differentiate how we drive growth within that market.

We had over 140 participants across 35 countries that were involved in a benchmarking survey in addition to our 50 mutual case studies, and from that we derived four key principle of mutual differentiation. So as we get into the four principles, there’s really three key things that we’d like you to think about. One is the principles themselves. So they’re fundamental sort of truths that serve as the foundation and belief on the purpose and differentiation of mutuality.

Within each principle we’ve identified some underlying themes. So these are frequently observed patterns across markets that really validate initial hypothesis of how mutuals operate across the framework components and provide new insights on how mutual are consistently operating.

And the underneath that is really the framework that we used to figure out what that principle of differentiation is. So we looked at things like policyholder and member engagement, we looked at financial benefits that are derived as mutuals that go back to your members. We thought about what is the difference between engaging as a member versus engaging as an owner, so fundamentals to the ethos of a mutual. We looked at community orientation, what is the value ad and the value creation that we’re trying to provide as mutuals, the governance as well as the funding structure. So we were key elements of the framework that we used to think about our principles and our themes.

So there’s four principles that we mentioned that came out of our scan and really are the essence of the conversation that we’d like to have with you today. And we’ll go into each one of these in a deeper dive but to outlay what really came out of our study is, is the four principles look at how do you start right from the top in terms of defining your strategy to become differentiated. How do you become intentional and deliberate in the way that you articulate yourself in the market as a mutual and use that purpose? The reason that you, your raison-d’etre to become very essential in the way in which you’re operating with your consumers and with your partners.

The four principles really focused on the following. One was driving a purpose-led strategy, really being rooted in long term thinking and value over profitability. So while profitability is core to any business, it was really being purpose-led and we’ll talk a little bit about what that means. What does purpose-led really mean and what are those components?

The second was being member-centric, require being having both an owner mindset as well as a consumer mindset, and very unique and distinct engagement strategies to derive what it means to be member-centric across those two components.

The third was around value creation for core members and this really looked at how do you service more of your core member and the periphery around there to achieve growth and innovation?

And lastly, it was around social and economic change across local communities and really thinking about social and economic sort of as a catalyst to look at underserved segments and fundamentally as part of its purpose, how do mutuals use that to really drive the way that they’re engaging with their network and with those around them.

I’ll pass it over to Jennifer Baziuk to talk about our first few principles.

Jennifer Baziuk:
Thanks Puneet. Pleasure to be here. Great to have the opportunity to speak to the ICMIF members. Having had the opportunity in my career to work both at a stock carrier and a mutual insurer I have first hand experience on what sets them apart from one another. And so simply put, a mutual is owned by its policyholders, also known as the members and so there are no shareholders here. The focus is primarily on protecting the interest of the members by offering insurance coverage and options that are tailored to suit their unique needs while being grounded in your core values that focus on community, collaboration and building strong relationships. And all of these support our first key principle, driving a purpose-led strategy that is rooted in long-term thinking and value over profitability.

If we took the time to simply compare and contrast the mission statements between stock companies and mutuals, you’d quickly see notable differences, not to suggest that one is right or wrong. However, stock companies typically focus on growth statements, increasing their market share, driving profitability, all of which are key success factors that drive shareholder value. However, when we took a look at mutuals and cooperatives, we see a common theme focused on looking after what is most important to your members, which is protection, safety, tailored services and products, community involvement and environment focused. That is what we believe is the key differentiator, what mutuality delivers.

Puneet’s going to talk a little bit later about the mutuality differentiation maturity model and you will be able to gauge where your organization currently fits across a core set of competencies that you can also align yourself with where you need and commit to improving your maturity as an organization. But coming back to the key principle one, we want to take a look at the three underlying themes that support this principle, the first being long-term value orientation. This is where, embedded in your mission statements, ambition statements or North Stars, we see a focus on four pillars, human, member, society and ecosystem. Human considers the wellness of your organization’s resources, your employees. So how are they deployed, how are they trained, how do they perform, what’s their health and wellness status, what is your culture? Where member looks at your member satisfaction, what is the loyalty to your brand, to your organization, what values-based metrics do you have, things like trust and innovation that is focused on improving the member experience?

Society looks at your corporate social responsibility, your alignment in the communities, your charitable programs. And lastly ecosystem, which looks at the network of organization including suppliers, distributors, your members and competitors in government and how they affect each other but most importantly, how they help you deliver the value to your members and improve the productivity of your resources.

The second underlining theme is operational initiatives and activities reflect purpose-led strategy. In simpler terms, actions speak louder than words. So making sure that your organizational activities, your initiatives, the service offerings all align with the commitment and it is rooted in your decision-making process in the organization versus seeing your decisions being led by revenue generation or cost reduction. And the third theme is about measuring. As the term goes, what gets measured gets done, and so by taking a purpose-led mission statement, breaking it down into the four pillars, supporting it with key activities and initiatives that are then measured by value drivers that can be linked to your financial results, you’ll be able to have ultimately a positive bottom line but be in the business for the long term.

So if we move to the next slide, you’ll see how we lay this out with some examples of KPI’s and corresponding metrics that can be translated into value drivers connected to your financial results. So let’s use human wellness as an example. If we focus on the wellness of your employees, which is typically one of your largest expenditures, and commit to creating a culture that includes growing your talent through training and upskilling, doing employee feedback or pulse surveys and having strong action plans to act on those results, launching wellness programs, ensuring there’s a balance between work and life, you can ultimately reduce your employee costs through things like lower attrition, lower onboarding costs, which ultimately drives down your expenses and feeds into your expense ratio.

We’ve provided several other examples for each of the four pillars where you can see that we’ve lined out what are some of the focus areas. I’ll just quickly run you through those. If we look at societal, so this is really about the environment, your regulators, the ethics. So what are the things that you’re doing around your social responsibility and how can you drive your employee experience and the affinity to your brand through a stronger brand in the community? And this ultimately can help you lead to cost avoidance. If we then look at member value, and I spoke about this already, driving innovation that improves your member experience ultimately will increase your member satisfaction which links to having greater loyalty and less turnover. This creates the ability to increase your share of wallet with your existing members. And ultimately this translate to profit.

And lastly, ecosystem. And as I mentioned, this talks about the ecosystem of who you work with from government to distributors to suppliers. And how do they impact how you’re able to offer services to your members and ultimately improve the productivity of your employees so that in the end you’re maximizing your capital and how you’re using that.

On the next slide, we just capture some of the common values or value-added services that we are seeing more focus by insurers as they start to look at adjacent markets and see how can they extend their reach and increase the share of wallet to their members by offering services that are in close proximity to what you already do or where you do it. For example in Canada we’re seeing loss prevention services. Helping our small business customers even our agriculture and farm have risk assessments on their property, provide advice in guidance and how they can avoid losses or claims. We also see legal advice. In many countries, you’ll see where we’ve captured here from Switzerland to the UK, to Australia, where we’re starting to provide 24 hour legal assistance to our members, roadside assistance in the US as an extension of the insurance coverage and we are also seeing coming into the market new home purchase support for those first time home buyers.

Now let’s take a look at the second principle, being member-centric requires an owner engagement model that is unique from customer engagement. Simple, right? A mutual member is both a customer and an owner. In mutual organizations there are distinctions between owner and customers, particularly their offerings and privileges and we believe this is the key source of differentiation. Owner centricity is what differentiates mutuals where the insurer can leverage the mutuality in their brands and distinguish themselves from others that focus on the customer. This notion of seeing themselves as a member or an owner promotes taking a longer term focus including involving members in decision-making around strategic direction and maintaining a more not-for-profit mindset. Within this principle there are two key themes, the first one being engaging members and the community in governance decisions. Seems obvious, the more you involve someone in the process, the more engaged they will be, the more likely they’ll be loyal to you and your product and your services. They feel as though they have a voice and a role to play, especially when the community is focused and they can see the direct impact of the results.

I spoke a little bit about this already but the concept of customer versus member or separate engagement strategies that clearly exist is our second theme sitting within this principle. And so on the next slide we give you a bit of a comparison of what the customer centric versus owner centric looks like from both an engagement point of view in financial benefits. I recall in my onboarding at the mutual insurer after spending 20 plus years at a stock carrier. I was amazed to hear some of the things that we did with regards to issuing dividends back to our members, having them participate in our AGMs where we openly shared our strategy, our approach to community and not-for-profit and charitable. We sought feedback from them, their insights and their opinions and these are things that aligned with my core values and I can imagine is what differentiates my choices about who I pick as an insurer moving forward.

Next we’ll go onto principles three and four and Puneet’s going to take us through those.

Puneet Chattree:
Thanks very much, Jen. Excellent. So, as we move into principle three, our third principle establishes that mutuals and cooperatives create really purpose-led growth through value creation for their core member segments and the periphery around them. So this principle was especially true for mutuals with large market share in their regions which grew rapidly beyond their core member segment and were often at crossroads between establishing large growth initiatives in the market while staying close to the original purpose of why they were developed. So as part of this, we noted that mutuals looked at defining their growth and innovation strategy really around two key aspects. So first was doing things differently to create more value and growth through existing core members.

Specifically we saw many large mutuals take a very segmentation based approach and tiering approach to their members often based on alignment to core purpose and calculating decisions based on member lifetime value for those members that fell within tiers closest to that purpose. Certain tiers have received access to benefits such as free prevention and value services, some of the one’s that Jen mentioned earlier, free policy endorsements, establishing differentiated rates and premium relief for certain classes and providing additional surplus allocations to members’ tiers that was dependent on the product that was sold.

This further included in making decisions to bring on less profitable and underserved demographics with specific member tiers that were aligned to the mutuals corporate risk. So a great example of this was mutuals in Australia and North America that were originally established to service the education sector where they created at cost, flexible propositions in a hard rate market targeted to attract early educator segments and in many cases were operating as workers and had lower premium affordability, recognizing that the lifetime value of this group within the education segment was quite high.

The second aspect of growth strategy focused on doing different things to grow through new revenue sources that went beyond the core member, those closely tied to their core members community and ecosystem. So when we think about that, and we’re really thinking about new revenue sources, going beyond that core member, what was really interesting was that we saw mutuals as they were defining their strategy really take the time to understand outside of their core, what is the periphery? What is the periphery in the ecosystem that directly engages with that core? So a great example of this was with some of the farm mutuals we saw across North America and France that continued to find ways to service more of their farmers and expand their share of wallet, so really within the core, while also finding new ways to innovate and grow in the market.

So one of the big areas we continue to see for this segment and we continue to see through our scan, is the expansion into small business insurance. And as you look at that, that really is outside of the core of what that farm mutual was looked to set out to do in North America and France but really that periphery was what was identified as a direct relationship.

So in looking at the preferences and needs of the farmers segment to find growth opportunities, it was really noted across many of these mutuals that many farmers and their families have small businesses beyond their agricultural roots and operations and that they are really looking at filling a large protection gap that was sitting there for many of these core members across that periphery.

So we’ll think about the example of tiering. Really what tiering allowed in that principle was it allowed mutuals to identify and reward their most valuable members to increase loyalty and engagement. And there is a couple of ways in which we saw that tiering happen. So some of it came purely from the use of member lifetime value calculation. So investing in the analytics to really understand what does lifetime value mean for us as an organization? What does that member mean in terms of that lifetime value and the opportunity for growth from a premium perspective? And what does that periphery look like in terms of value for us, so think about secondary products and secondary services that we can offer.

The second part of tiering really looked at segmentation and there was a very traditional view. It looked at as we continue to grow, and we continue to go well beyond our core… And again, this was a really important thing for large mutuals, how do we go back to the way that we rooted ourselves in? How do we start segmenting the way in which we market, the way in which we communicate, the way in which we engage to those members. So a lot of focus on that segmentation and really thinking about sub-segments.

So not just saying that this is a cluster of all of our farmers but really looking at it from young farmers to farmers that are about to do a transfer of their business and wealth to their families and thinking about the different approaches in which they can engage and what’s the unique value and incremental value they can provide based on that. So moving onto our fourth principle, our fourth and final principle of differentiation notes that how a mutual leverages its platform for social and economic change across local communities and underserved segments is fundamental to a differentiated brand as a mutual and cooperative.

We see through our scan that commitment to social and economic change is the key characteristic of mutuals, often aligning to social initiatives that are most critical to the local communities and core members they service. We’ve further seen from our recent EY Global Consumers survey that we’ve conducted in 2021 that over 70% of personal and small business consumers globally across developed and emerging markets indicated that a carrier’s commitment to social and environmental change was a key factor in their purchasing decision which becomes a critical advantage in a mutuals brand articulation especially in a hard market.

So our scan showed us that often mutuals are at an advantage through their operating model to define and accelerate their ESG strategy which often included clearly defined targets and initiatives on a climate risk management and moving from protection to prevention across the member journey. We also saw greater focus on inclusive insurance within underserved areas of their community.

So this included within developed markets, underinsurance, as well as within emerging markets, non-insurance leading to new and innovative ways to provide low cost access to fill protection gap for both that under-insurance as well that non-insurance, such as through things like risk pooling with other like-minded mutuals, creating new distribution ventures focused on tackling very niche segments that were underinsured.

Lastly we saw as part of this principle that those mutuals that had embedded social and economic change through the fabric of their mutual operating model placed emphasis on measuring and articulating social KPIs and this was really embedded all the way from bottom up and top down. So it was something that was in the fabric of mutuals to look beyond just the strategic KPIs that they’re looking to drive but really linking it back to social KPIs. So when you think about some of the ones that this included. We look at things like percentage of insured below the poverty line. So measuring the number of community members within that core and within that periphery that were below the poverty line that we found ways to insure, whether that be through taking loss in some of our premiums initially, whether it being through finding different ways in distribution. Often digital distribution was great way to do that or risk pooling.
And the social impact of the initiative could be measured both pre and post the initiative. So looking at where were we versus where have we come in the way in which we’ve changed our operating model to insure those that were below the poverty line.

Another KPI that we looked at was percentage of minorities that were insured. So that’s really looked at the contribution of insurance to a quality amongst minorities. So again, measured both pre and post initiative to assess the impact. What this required for the mutual was to really think about within their core, with beyond that core what are the minority groups that we’re looking at, that we’re looking at targeting and segmenting and how do we find ways to really take a very deliberate approach to marketing and lead generation towards them and making this more accessible. Making protection product as well as prevention services more accessible to minorities.

Percentage of insured at retirement age or above. So in many of our segments, we saw a huge gap, not only in protection but really around financial wellness. We continue to see that which has been accelerated by the pandemic. So this really looked at what were the different ways in which mutuals were able to go in and either partner with service providers through affinity partnerships and that could’ve been credit unions, financial planning, tax planning but even beyond that, really looking at ways in which we were creating and innovating our, going from a product architecture to more of a proposition architecture to really target folks that were going towards retirement. And thinking about how do we engage in ongoing communication to support not just protection but overall financial wellness?

And the last and really interesting KPI that we continue to see was around social investment ratio, so measuring the amount of resources an insurance provider dedicates to information, education, loss prevention, communication in the local community and how they also bring in and engage with various businesses into the ecosystem to provide that support around prevention, return to normal and the way in which we looked at starting to calculate a direct financial return from that engagement.

So that brings us to our four key principles around mutuality and when we think about looking at the different markets that we assessed, just giving you an example of some of our more developed markets in the mutual space. What we clearly saw was that certain markets were much more advanced in the way in which they materialized and operationalized these principles over others. So we think about regions like Australia, as you can see a high degree of maturity across these core principles. Often they were the leaders in the way in which they engaged with their members through these four principles and the way in which they used their purpose to drive strategy.

When we look back at a region such as Canada and France, which have a high sort of concentration of mutuals in their market, we started to see a little dilution in the way in which these principles were being operationalized. So often the purpose was there at the top, the intent was their at the top but when we got down into looking at how it was operationalized on a day to day, we started to see some of that dilution in these principles.

And this is really important because what we’re often seeing around this scan is that while these principle are so core to differentiation and were talked about at a top level, the operationalization of them and how they are embedded into strategy and day to day planning and the way in which they’re embedded into operational performance and the way in which individuals engage as employees with these organizations to driving towards these principles is something that often was lacking in many markets. And so the intent was but the plan was not and really we see this as a critical component to driving that differentiation. So thinking about your operating model, thinking about how you take it beyond just the messaging in your strategy to really drive these principles on a day to day.

So we look at the maturity model. We at EY established coming out of this a mutuality differentiation maturity model that we’re often going as we speak to different mutuals really thinking about what is that point of differentiation. So when we look at things like community orientation. Really the point of differentiation comes around that partnership charity involvement, really zoning in on specific social causes that are critical to the core members, having unique engagement strategies within the community and within that core present, partnering with the right charities within both a local level as well as a national level depending on size and being able to have flexibility and how funding is distributed.

Policy and product differentiation looked at, again from a point of differentiation, products that are tailored to the niche customer need. So thinking about that core and we used those examples of nurses, education community and farmers where we’re really thinking about how do we embed prevention into our core protection product, and how do we really tailor it to what that consumer wants in the core and their periphery. So going back to the examples of for example getting into small business when we see that opportunity and that need come from our core.

Value-add services, that point of differentiation again for mutual in terms of operationalizing was really around aligning with product offerings and company purpose and strategy to provide value services. So starting to partner with like-minded, purpose-driven partners on the focus around prevention and return to normal often during time of claim as well as around financial wellness and health wellness. These were all critical things that mutuals would invest in and it wasn’t a growth strategy. It was really a retention strategy. So that’s the big distinction, right? For a mutual to service it’s core, it was around retention.

Member engagement, as we think about that, we think about point of differentiation, really it was around a moderate to high level of learning when we think of that differentiation on the principles of mutuality for branding and awareness. So thinking about how do we actually articulate these principles in a meaningful way back to our members that we’re taking a purpose-led strategy. Companies leveraging mutuality just really engage with their customers. Talking about what mutuality means, going back to your rasion-d’etre of what this was set out to be, and even to understand member needs by communicating with them, looking to engage with them in ways that were often different as stock carriers, so bringing them as part of governance decision, bringing them as part of steering committees within specific initiatives that mutuals were looking to take. These were some of the things that we were really seeing as points of differentiation around member engagement.

And then lastly was around financial benefit. So when we think of a point around differentiation around that, it really was around thinking of consistent financial benefits given, whether that be surplus distribution, cost relief, premium relief or ways in which to engage in rebates through value services for free. These were some of the financial benefits that were really articulated and again, they go back to that tiering of members, it often was not for all members. It was based on that core, that tier, that affinity group that we were looking to service when we were providing these.

So we’ll close off with… and we’re looking forward to taking questions as we go into this but we’ll close off with this. As we think about this scan and we think about the last couple of years as we started to really dissect what is differentiating mutuals and where we are today, it’s very clear that consumers are looking beyond price and to think about how they engage with their protection provider. We started talking about all of the different investments that are being made in digital front end and new ways to engage with our intermediaries. Equally important is how do you live your purpose? How do you live it on a day to day basis? And there has never been a greater moment than now as we think about the focus on sustainability, on social value, on filling the protection gap. For mutual to really use the reasons that they were set out to be as the foundation and the catalyst and to really drive purpose and strategy and differentiate themselves as growth in the market.

So thank you very much and we’re looking forward to questions.

Ben Telfer:
Thank you very much Puneet and Jen for that excellent overview of the EY Global Mutual Scan. And Puneet, that last comment I think really would resonate with all our members, especially at the moment when we’re just coming out of the COVID crisis and then moving into the climate crisis and again, lots of issues going on around the world.

First question, Puneet, you touched on it just on the end as well talking about how mutuals need to sort of leverage their purpose and long-term value and also the CSR and climate strategies. The question looks, it says that there’s many other organizations, not just insurers but organizations around the world that are profit driven companies that do this and have just started to do this. What would you suggest that mutuals do to really articulate the difference that they have in their structures as opposed to a profit driven company that has just started to do this?

Puneet Chattree:
Yeah, great question. So I think that the most important thing for a mutual is to go back to why they were sent out, the purpose. And I go back to that concept of purpose and I think that is really where you’re going to see the differentiation in what’s driving a lot of the social investment and the initiative. So there’s no doubt that we’re seeing across large stock carriers right now the focus on ESG, looking at the United Nations 17 standards and how do we meet those standards, thinking about where we’re going to start making and driving impact across that?

But that in a couple of years, is going to start becoming very homogenous in the way in which we address it, right? So having a chief sustainability officer, thinking about where we place our investments, thinking about how our footprint around carbon. These are going to become almost foundational elements. So for a mutual, it’s equally important to go beyond. We think of ESG, we often just focus on the sustainability and that’s where stock carriers are really looking at but we really need to go beyond that and we need to think about that social underserved element of our core members that we can really drive into.

And I talked about the concept of underinsured and non-insured. So underinsured in a developed market is a really massive thing right now. So forget about the protection gap in emerging markets. We know that’s there. This is really about what is underinsured within my core and my periphery right now and how am I finding ways to address that. How am I making insurance more accessible, whether that be through things like innovative things like embedded insurance, right? Offering it through partnerships, offering it through a very segmented approach to discount in premium based on certain segments, so lifetime value based pricing. These are different ways in which we can start making very distinct ways to service the underinsured.

Equally important is what is my social role around the non-insured in emerging markets? And this isn’t something we do.This is great opportunity for us as a community of like-minded, purpose-driven carriers within the sector to come together and say, “How do we tackle some of these fundamental issues?” Right? Going back to our core. So thinking about the droughts that we’re seeing across geographies for farmers, where a lot of mutuals started, right, and tackling that together to make protection more accessible, whether that be through parametric based insurance? And investing as a sector in that or it being through risk pooling to get access to greater risk capacity. Jen, I’d love to get your thoughts as well on that.

Jennifer Baziuk:
Yeah, I mean we’ve been having, and Ben, with members of ICMIF as well this very conversation around the notion of how do we on the principles of mutuality where it’s around coming together to solve a unique problem for a unique group of people. How do we use those values as companies to come together in cooperation versus competition and solve for common problems that we have? But also extend the reach in our ecosystem to other third parties that can support us in understanding, how do we service this underserved market of folks within Canada or globally around the word? And so I think, like Puneet, well said and I think this is definitely where we can differentiate as mutuals because that’s our core values of who we are.

Ben Telfer:
Excellent. Thank you both, great answers to that, very expansive question. More questions coming in. This one looks at… I think you actually covered this. The question came in before you actually looked at the difference between regions, but it simply asks, “What were the main differences that you saw between different regions around the world?”

Puneet Chattree:
Absolutely so. Going back to that maturity scan, there was very clearly different regions in the way that they manifested. And I talked about Australia. Australian mutuals really looked at what they were doing as an affinity, as an opportunity to differentiate and it was outstanding to think about some of the case studies that came out of Australia around how they use mutuals as really an affinity based segment and say, “We’re going to drive different value for this member base.” One thing I will say that started really becoming a common trend through this scan was as mutuals got larger and as they moved further away from their core members we started seeing some of the dilution of these principles.

And that doesn’t mean that you don’t grow and that doesn’t mean that you don’t become bigger than the original purpose of what you set out but equally important, it goes back to that message of how do you stick your strategy and continue to find ways to go back to that reason of being? And the ones that did that well and there are ones that were quite large. When we look in the US and we look at some of the ones in France where there were really, really massive mutuals in that market that owned significant market share. They were still going back to those principles and finding ways while thinking about growing beyond the core. But they took a very deliberative approach to that.

Jennifer Baziuk:
And I would just add to that as someone who focuses more on delivery and tactical in the day to day, the maturity model really resonates with me and if I think about having a role as an executive or sitting at a C-Suite previously, I think for me understanding where I sit on that maturity curve and recognizing where we want to be as an organization and then sharing that within our strategy and within our initiatives and guiding our decision making on a day to day basis that we are rooted in that elements of that maturity model so that we know what we aspire to be in our strategy. And I encourage everyone to take the time to really look at that maturity model and understand and gauge where you feel you sit and do you aspire to be more than what you are today? And then go back to these principles and look at what underlies them as themes and how you can start to drive that behavior in your organization.

Ben Telfer:
Thank you Jen. Puneet, I think you can almost see my next question that came in because it says, “With growth and scale, sometimes it’s hard to remain closer to your customer or your core member segment, your affinity group.” Do you have any other example of how mutuals have overcome this? I know you’ve just covered it but is there anything else that you think you can mention to help provide an answer to that?

Puneet Chattree:
Yeah, absolutely. So one of the biggest things that we actually saw for, without naming specific names, but you can imagine some of these mutuals that have really dominated market share in the regions was as part of that whole concept of sticking back to their core and thinking of the periphery, they brought their members and their partners in to the decision-making, right? They engaged them into the conversation. They established committees with those members, core members. They brought them into decision-making. They brought them into governance decisions, right? They brought task forces together on what is going to be the greatest value creation? So when you think about that, you’re taking, again, a very deliberative approach to say, “I know I’m going to grow beyond. I’m looking at scaling my auto, my own product well beyond that core but I still want to think about value creation within that core and its periphery.” That’s still going to lead to high growth and you’re working directly with that group saying that, “This the reason that we set out, so we need to still figure out ways to service that.”
And when we think of that farming example and we think about small business, in some markets there was over 50% of core members that had small businesses within their network, right, that were not being serviced for insurance. These are micro SME, right? Micro enterprises that were not being serviced. And so it’s a great example of how we got those members together to say, “Where do we see that need? Where do we see the opportunity?”

Ben Telfer:
Thank you Puneet. I think we got time for a couple of more questions here. The social KPIs presented, how do carriers obtain the data to calculate these ratios? Is it an estimated based on location of members or is additional data collected during the quote process?

Puneet Chattree:
Yeah, that’s a great question. So the answer is actually both of those things that were suggested. So the data strategy to calibrate these indicators is really about pre and post as we mentioned. So it’s during, “How are we starting to engage and bring in lead generation of those segments?” We talked about minority groups, we talked about underinsured, those that were at the poverty line, defining what that means, thinking about where those segments sit and what are we doing as calculated marketing and lead generation around that. And the second is around at the point of engagements, whether that be your digital channel, whether that be your brokers that you’re looking to work with, to target that or whether that be working with another mutual because that is actually what we’re seeing around some of these segments to target, and setting up things like joint ventures or setting up things like new distribution models to target it, to make it more affordable. Those were the ways in which we started collecting data at that point all the way through to quote and to bind and what that binding looked like.

Ben Telfer:
Thank you again, Puneet. I think we got time for a couple more questions. The presentation mentioned the different engagement strategies based on customers and owners. Did your research see any different marketing strategies about how mutual companies marketed the benefits of being sort of covered by a mutual company between customers and then between those that are also the owners of the organization?

Puneet Chattree:
Yeah, absolutely. So we did and Jen, I think it would be great to just get a little bit of views on how, from your experience we’ve actually seen that practically, right, looking at marketing as customers and owners.

Jennifer Baziuk:
Yeah, thanks Puneet. I think highlighting, we’ve seen from a marketing perspective if we look at individual company sites and how they promote the role of the member within their organization whether it’s through not-for-profit, charitable organizations where they’re highlighting the involvement of the community and the impact that they’re making there. We also see where they’re actively looking for involvement in engagement in initiatives, whether its coming to the AGMs, encourage them to have a voice, making that an event in and of itself. I think this is where we see that companies that stand out from the other carriers or demonstrated more maturity in terms of this regard is like how open and transparent they are about encouraging the involvement of their members to participate in the things that they’re doing. And so I mean it’s quite evident with those that have been successful that they don’t shy away from actively pursuing that engagement.

Ben Telfer:
Absolutely. Anything to add on that Puneet?

Puneet Chattree:

Yeah, I think Jen covered it well. It is really around finding ways to keep your member engaged throughout and really taking the time to define those unique engagement strategies, right? Understanding what is that owner mindset versus what is that customer mindset and what are we looking at? When we think of NPS, we’re often thinking of the customer but one of the big metrics that we’re starting to see as an owner is net trust score, right, which is very different from a net promoter score. So how do we start looking at net trust as an owner? And you know what Jen mentioned, all the different ways of engaging members, that is how you build trust. That is how you get them into that purpose and believing in that purpose and helping to be part of that purpose. Some really important things to think about.

Jennifer Baziuk:
Yeah, and I think which tees up another great segment, Ben, we’ve been talking a lot about trust and the role that trust plays in value based proposition opportunities for insurers, specifically starting to talk about the topic of open insurance, which as a jump off from open banking and understanding the role that trust plays within open insurance with you and your members and where we see insurers that are going to be able to accelerate on that journey through things like data trust and other aspects of it. So it is core to the success.

Ben Telfer:
Excellent. Thank you, Jen. Couple of more questions. I think we just about got time. There’s two very similar questions here, which one was asking about the differences that you observe between distribution models and how that influenced the findings specifically around sort of the agency and the independent broker model compared to say those going direct. And then sort of second part of that question that’s just come in about how are mutuals across the globe able to deliver on their mutual value proposition through independent broker channels? So again, they’re not as close to say direct to consumer insurers.

Puneet Chattree:
Yeah, absolutely. So all the examples and we think of the over 50 case studies, there was a diverse distribution strategy, there was intermediary engagement in some areas, there was a direct affinity, direct to consumer affinity play and going to that second part of the question which was so important is how do you get… We talk a lot about the members and bringing them into the purpose but equally important is selecting your partners that are going to be an extension of your brand and how do you equip them to do that, to talk your talk, right? And so articulating that as part of your strategy, really articulating the key performance indicators.
We looked at some of the long-term value pillars that are so essential. So working with brokers, you’re doubling down on brokers or intermediaries or any agents, to say, “Are they part of a similar sort of focused around sustainability and social imperatives that we are?” Right? And articulating them back to the market. That’s really important but then educating your brokers and your agents around what your purpose is and how do you then communicate that as a broker to the end customer, right, around why they would be selecting you as that partner and that carrier versus another, is really important. So we saw a lot of that focus on the intermediary model.

Ben Telfer:
Thank you, Puneet. Great answer. That’s a question that we hear from members quite regularly as well. Just one final question. I just want to give you an opportunity, Puneet, you covered this in your final remarks as well but where do you see the biggest opportunities for the mutual and cooperative sector as we move into this post COVID new normal? What would you say were the biggest opportunities that sort of our members can sort of seize upon?

Jennifer Baziuk:
I think for me just given it’s been a topic of conversation, it’s around this notion of cooperation within the mutuals specifically in the markets that you serve and not looking at each other as competitors and understanding how you can come together to solve common problems which is really the foundation of ICMIF, right, and why we’re all here today. But taking that belonging and that belief around why that’s important and actually acting upon it and starting to come together and truly understand what are the common problems that you can solve for, which we’re not seeing the stock carriers do. That’s not the position that they’re taking and so I think we really have the opportunity to look at aspects of the market that are either underinsured or are well placed but we can take that market share away from the stock companies if we truly look at things in a more collaborative, cooperative approach to be able to be successful. Puneet?

Puneet Chattree:
Absolutely, Jen. I would agree with that and then I would say that that is really, it’s about collaboration, it’s about looking at ourselves as a very niche segment. When we look at mutuals in aggregation, right, we’re making up close to 30% of that market share across developed insurance segments. That’s massive. And so that collaboration that Jen mentioned is so critical to figure out solutions to common problems that we’re seeing but I also think that as a mutual, the greatest opportunity right now is… and I keep going back to this. It’s about communicating and engaging your partners and your customers in your purpose, and I really do see that as making it really deliberate every time.

So whether that be your broker as they’re engaging, whether that be your underwriter, your claims agent, right, really going back to that purpose and when you think of tactically what that gets into you, right, it means that I may be going down a digital first to achieve our self serve, our on claims and FNOL to achieve efficiency but I’m still putting humans at the center because that’s so imperative to me as a mutual, right? Whereas a stock carrier may come back and say, “My cost to serve is my main driver of reduction.” And I think it’s when we’re starting to get into those types tactical examples of operationalizing our purpose, I believe that is the greatest opportunity in addition to collaboration.

Ben Telfer:
Excellent. Thank you very much Puneet and Jen, and really do agree with that idea of collaboration and partnerships. And I mean we’re very lucky to have a very engaged membership of some of the leading mutual and cooperative insurers around the world and also working with national and regional associations of mutuals who again collaborate within their membersship.

Just a final thank you to both of you for participating today. The full scan is available on both the EY website and the ICMIF website. Everybody who’s registered to this will be sent a link to that as well. We’ve actually got some more content from EY coming up that will shared with members that looks at each of those four principles in detail and that will be released via the ICMIF Knowledge Hub.

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