Mutual insurance – The most modern business model in insurance

In this webinar, insurance academic Dr Antti Talonen reflects on the key trends in insurance today and in the future with a special focus on the specific characteristics of customer ownership and mutual insurance. Taking inspiration from his vast international research on the sector, Antti shares his thoughts on the 10 most important ideas of mutuality that he believes should be taken into account by every mutual/cooperative insurance company. Concluding that the mutual model is the most modern business model in insurance, Antti provides an analytical understanding of mutuals that will be of interest for insurance professionals, regulators and legislators, as well as academic scholars.


  • Dr Antti Talonen, Postdoctoral Researcher, Governance of Sustainable Business Models, University of Helsinki (Finland) and Member of EIOPA Insurance and Reinsurance Stakeholder Group.

Dr Antti Talonen is an academic scholar with an extensive experience and background in the field of insurance. He holds a doctoral degree in insurance science from the Tampere University (Finland) where he defended his doctoral dissertation on mutual insurance companies (“Customer Ownership and Mutual Insurance Companies: Refining the role and processes of psychological ownership”). In his current role at the University of Helsinki’s Faculty of Law, he has continued focusing in insurance under his research theme of governance of sustainable business models. In the international scientific community, Talonen acts as the associate editor of the Journal of Co-operative Organization and Management which is the number one outlet in the world for this theme and is published by Elsevier. Talonen has a strong background in collaborating in the interface of science and practice. He serves as a member of EIOPA’s Insurance and Reinsurance Stakeholder Group as well as being a member of the Expert Group on Digital Ethics in Insurance. He is also the co-founder and -organizer of an annually held MIC-conference bringing together the academic and practical worlds to discuss common and current issues facing insurance industry. 

Ben Telfer: 

Hello, everyone, and welcome to today’s ICMIF webinar, “Mutual Insurance, the most modern business model in insurance. Today, we’re very pleased to be joined by insurance academic Dr. Antti Talonen. Antti, you’ve sent in the ten most important ideas for modern mutuality and customer-ownership that you believe should be taken into account by every mutual and cooperative insurer.  Antti will be sharing a bit of his background and some of his academic research, as well as how he’s engaged in the academic community in research into the mutual and cooperative business model. Antti, thank you for joining us today and I’m pleased to hand over to you. 

Dr. Antti Talonen: 

Okay, hi Ben, and hello to everyone online as well. Just want to start by saying that we have been collaborating with Ben and ICMIF for a while right now. And I’ve had the possibility to get familiar with this ICMIF webinar concept and I think the concept is just fantastic. It has been already before the coronavirus, but it has actually become even more important during these exceptional times. So the concept is just fantastic and it really enables us to come together from different parts of the world and discuss about pressing issues about mutuals and perhaps insurance in a more general level as well together. So it’s great to be here. And thank you for inviting me to discuss with you and talk with you. 

What I will be doing today is that I will be sharing my ideas about 10 ideas for developing mutuality, developing modern mutuality. And these 10 ideas will be, they are actually, all of them are based on our research, the academic research and observations that we have had, me and my colleagues, and along the way in different countries. Not only Finland, where we are coming from, but internationally. And if you are a representative of a mutual company, then I hope that you can treat these ideas maybe even as an agenda, or a checklist for yourself when you’re developing mutuality and modern mutuality in your own company and in your operations. 

But before I go more in detail into these 10 ideas, just few words about myself so that you can get a picture of who am I and what I do for a living. Oh, there you go. Let’s change the slide. So I come from Finland, I come from the University of Helsinki, where I concentrate in sustainability of related issues as a researcher, sustainable business models related issues and insight, this an upper theme that I have really related to sustainability. I have a specific focus in the insurance sector and mutual insurance companies in particular. 

Beside my current role in Helsinki, I have a doctoral degree in insurance science from Thumbay University which is also in Finland. So, that’s the place where I started my academic career. And my doctoral dissertation was specifically about mutual insurance companies and customer-ownership. You can find the dissertation from the internet if you want to read it, you can read it for free, you can access it for free, you can find it by googling it or utilizing the link that I have put on the slide. So up to my PhD after I wrote the PhD, I have continued my research with mutuals, we have done a lot of research on mutuals in several different countries and from several different perspectives. I have also done a lot of research on digitalization of the insurance industry, the future of the insurance industry, so these are the two big themes, research themes that I have related to insurance sector. So we can say that mutuals and digitalization, they do form in many ways the core of my academic activities and the journey has been, to be honest, very, very interesting these far. 

What comes to my other scientific boasts, I act as the associate editor of a scientific journal called Journal of Cooperative Organization and Management, which is basically the number one outlet, a scientific outlet in the world in its own theme. In our channel, I also act as the guest editor of our coming special issue on mutual insurance, where the call for papers is open at the moment, and the deadline for submissions is in the beginning of March, next year. So if there are scholars who are listening at the moment, I warmly welcome all the submissions to this special issue on mutuals. I believe it will be a highly cited and a good special issue, and hopefully will boost the research on mutuals further. 

While I have been serving in this journal, it has been a really good opportunity to follow what is going on in the field of cooperative and mutual research. So it has been a very, very interesting job. In the same time, along my academic posts or activities, I have seen it’s hugely important that we continuously develop and enhance the interaction between academic and practical worlds. And because I think that there’s a lot that we can learn from each other, a lot. So let me just give you a couple examples of these initiatives that I have been involved with in this interaction. 

A little bit off the evasion was published in 2018. The central association of Finnish co-operative’s, the COOP Center Pellervo published a popularized special issue on mutuals in their flagship journal called the OT magazine, that is targeted to the executives and administration of cooperative and mutual companies. And I was personally very closely involved in generating the content for the issue. And big idea that we had, was that we wanted to develop an issue that can be given for all the new people who are coming into a mutual company, whether it’s new employees, new executives, or new administrative people so they can get this magazine and then they can rather quickly get a good glimpse of what mutuality is about, what is the company that they have come into. And I think we succeeded very well. The issue was basically sold out straight away and Pellervo, made a decision to make a digital version of the magazine that can be freely accessed in the internet. 

Unfortunately, the issue is published only in Finnish but I wanted to put this forward here because I think this is a very good example of what we can achieve when we’re working together, the academic world and practical worlds are working and collaborating closely with each other. Another example is that we established a new conference in 2018 on mutuals. And the big idea of this conference was to bring together the academic and practical worlds to discuss about the pressing issues related to mutuality and insurance because we didn’t have this kind of conference before that. The first conference was a sold out event. We had a great honour to have Sean, the CEO of ICMIF as our keynote speaker in the first seminar and it was a total success, I have to say. 

And that’s also why we decided straightaway that we will be organizing this conference annually, every year. And every year, we want to go to different countries, engage new communities to come on board. And last year in 2019, we went to Zagreb, Croatia, where we organized this conference for the second time, we had a real official name on board already as well. We call it the MIC, Mutual Insurance Conference. And again, we had a sold out event. Professor [inaudible 00:10:44] from the University of Zagreb, made an awesome work with his team to make everything happen well, in practice in Zagreb. And this year, we had plans to go to San Jose, Costa Rica, organize the conference for the third time in a row. But as with many other conference this year, we needed to postpone it to next year or maybe 22. Let’s see how the pandemic is going to be. 

But I think MIC has been very useful and a good tool to engage on the other hand new academic communities to come on board and get interested about mutuals and also, I think we have been able to increase the collaboration between the academic communities and practical mutuals. So it has been very interesting. 

Finally, for the last year, I’ve been involved quite closely with EIOPA as well. I serve as the member of their expert group on digital ethics in insurance, which is a very interesting group to work with. And in addition, I was elected as the member of EIOPA’s insurance, a reinsurance stakeholder group for a four year term this July. So, next four years are going to be very interesting to work with these very brilliant leaders and experts of the insurance industry in EIOPA. 

But now, I think we could turn into looking at the 10 ideas for developing modern mutuality. So, as I mentioned, these 10 ideas are based on our scientific research, our observations that we have made internationally along the way, along the journey, and I hope that these ideas will also provide you an agenda for the mutuals, provide an agenda or a checklist to develop mutuality in your own mutual. 

So, number one, remember who you are. You are a company owned by your customers. And this means that the owner value of a mutual is not defined by profit for invested capital, but as value and benefits created for your customer-owners, as consumers. So the starting point for your operations is fundamentally different compared to invest your own insurers. And I think this is a very important issue to keep in mind in actually everything, what you do. It defines basically the whole direction of the company. 

For example, when you develop your company, you develop new things in your company, this definition is the idea that you can basically come back to every time and ask from yourself, are our activities in line or is the things that you were developing, are they in line with the idea, a definition of who you are? A company owned by customer. So it provides the upper strategic idea of what you are. 

And in some cases, it may look like, when we look at the mutuals, that this is not forgotten, but it’s not sure that people change. New people are coming to the company and old ones are leaving. So when the new ones are coming in, they may be coming from companies who are not mutuals and so on. So they may not have that acute idea of what a mutual company is about. So, although this may sound a bit obvious, I want to emphasize this. And to be honest, although it may sound a bit obvious, I think I will treat it as the single most important idea to understand. The single most important idea, if I should pick one. So, it creates the base for everything that you do. This is number one. 

Number two. Now, since you were owned by your customers, your job is to take care of that specific customer-owner community. It may be certain to your people living in certain geographical area, it might be representatives of certain profession, or even organizations of certain industry. And by identifying the community that you serve specifically, it makes it possible for you to understand what are the needs and interests that are common for all the customer-owners that you have? So, there might be nuances in the customer-owners needs and everything, but if you are example, a regional mutual, then the regionality is basically the idea that creates the common interests for your customer-owners and the upper level emission for you as a mutual company. 

So, to maybe simplify this a little bit, your job is not to be identifying more and more profitable business areas all the time or sell as much different insurance services and products to your customer-owners, but to make sure that you serve the customer-owner as a community in the best possible way. And I think this is important. I also think that your role includes really important societal questions as well. For example, and if I illustrate a hypothetical situation, insurance companies tend to have a quite a lot of capital in the company. And insurers are very significant investors as well. So if we think about the communities, mutuals are very important tool for the communities to keep these assets, these investments in their own control, in the community’s control. Partly in a way that the investments are even invested back into the community. And in that way, the mutual companies have an important role in serving the capital sub light needs of the community as well. 

For example, I come from Finland, which is a small country. So if we wouldn’t have our mutuals here, owned by Finnish people, I believe that Finland would be much more poor in capital lies than we are right now. And this is the case with every other community, with every other country. So it’s a really important thing. Dependence on your customer or community is also one of the main reasons why many people like to say that customer owned companies are or at least should be naturally responsible and sustainable actors because your job is to take care of the community. So, this is a really big idea today, specifically when we’re talking about sustainable development and responsible behaviour of companies. But you need to make these things visible. You have an important role. Mutuals have an important role but you need to make this visible for people to understand how important role you have. My message is that don’t hide your important role in the community. Make it visible. That’s a big advantage you have. 

Then number three, remember to focus in operative activities and implementation as well. I put this here because sometimes it seems that’s although we are very clear on a strategic level about what the mutual company is, and what does it mean to be a mutual, we leave it there. And in the same time, then we will organize and measure the operative functions, operative activities of the company in a very similar way than we do in investor on insurers. So, however, if we are truly, or if you are truly too about the strategic level idea of creating value and benefits for the customer-owners as consumers into practice, you need to think what it means in terms of organizing, leading and measuring the operative functions and activities. 

For example, I think, one example from our research, where we found out that in some … this example is about claim functions, claims. That in some mutuals, the claim functions does not try to find loopholes to deny the claim, but to pay the claim always, if possible. So the mutual wanted to emphasize that this customer owed nature really, really creates a sub strategy for the claims function this way. And the logic differs, it’s very different. So it’s a good example. And this kind of a creation of specific sub strategies for functions and operative activities, is I think a very good way to make the customer owned nature of the company alive in a way. In other words, define how each and every operative activity contribute in creating value and benefits for the customer-owners. This is the big idea. 

And my message here is to be clear about who you are on a strategic level, but remember in the same time to implement that idea in your operative activities by organizing, leading, and measuring as well the operations in the right way. That they are aligned with the big idea, who you are. 

Then number four. With number four, I was thinking that we quickly consider consumer behaviour more specifically as well. Now, one claim that I hear every now and then is that consumers really don’t care. Whether they are owners of an insurance company or not. These might be partly true with some consumers, partly true but not exactly. Now, one reason why people may say that ownership doesn’t matter, is that they don’t really understand what ownership in a mutual company means and they don’t recognize the concrete benefits that ownership can offer. For example, in one of our research, I remember people who we interviewed, saying that they have been customer-owners of the mutual for many years right now, but they still haven’t got rich. So, that’s a good example how in a wrong way people can understand the ownership of a mutual company. It’s not about getting rich, it’s about getting the services and products that are the best for you as a consumer. 

So there is a lot that we can do and a lot that can be made to make ownership and its benefits concrete for customer-owners definitely. And this is a theme I concentrated in my doctoral dissertation specifically. So if you want to know more about this theme, I think a good way is to start by, for example reading my dissertation. I’m also more than happy to provide you with additional tools and information in this regard. It’s a very interesting field. And my message here is that legal ownership per se or as such, does not usually influence on people’s behaviour. But if you can make ownership and its benefits and value concrete, it has a significant potential to influence on people’s behaviour. So legal ownership as such and it’s so called psychological or behavioural effects are basically two separate but in many ways interrelated issues. This is important to remember. 

Number five, don’t talk about customers. Firstly, this is an issue that has its roots in one of the several differences that mutuals have compared to other cooperative companies that we have in our societies. Since in mutuals, it is often the case that ownership of the company is automatically formed when customer purchases his or her policy or comes insured. And if we take this idea a little bit further, this means that or this leads to a situation where mutuals should not have any regular customers, but only customer-owners. I know this is not the case in every mutual, but this is often the case. And if you have only customer-owners, or member owners or members, no matter how you call them, in the company, so I think it’s okay that you utilize the right terms. So, I think it’s an important communications related issue as well. So if you were about to develop mutuality, emphasize the mutual nature of your company, utilizing the right kind of terms and words in this sense is probably, I would say one of the most low hanging fruits that you can pick up in developing mutuality. 

Communications-wise, this is a good way to make your customer-owners or member owners and members to understand who they are, what kind of roles they have in this company. Because there are numerous customer-owners as we discussed on the last slide, who don’t really understand that they are also owners of the company, or they understand the ownership wrongly. So it’s good to be clear with them about who they are. 

And if I just give you an example from our research, again, I think you can look British mutuals. Mutuals in Britain are very good in this, I have to say. They even start their annual reports by saying, dear members, dear member owners, or dear customer-owners. So they are very clear about who they are talking to. And that’s an important thing. I also think that this is important, not only externally in your external communication, but also in internally as well. And by this, I mean that if you want your employees to understand what’s your company is about, what mutuality is about and who they are, who your employees are serving actually, it is a rather convenient way to start utilizing these right terms in your internal communications as well. 

So, my message is that words matter, terms matter, language matters. Language, terms, words, they actually, in many ways, they create the reality of where we are in. Many things are socially constructed. So be very clear with the terms and remember that this is quite a low hanging fruit to pick up, so it shouldn’t be that hard or challenging to change the communication this way. 

Number six. Remember to communicate the customer-owner perspective. This is an issue that I pump into every once in a while when I see mutuals reporting their performance. For example, some mutuals may report that they made such a great profit this year. And by saying this, or after they say this, they conclude that the year was very successful. And now, if I want to be mean, I’m not a mean guy, I don’t want to be mean, but if I want to be mean, if I would like to be mean, I could say that, okay, so you were successful in what? Getting as much money away from your customer-owners or in what you were successful in. So I’m not saying that mutuals should not make profit or surplus as they say. Mutuals need to make profit actually. But the reasons to make profits or surplus are different than in an investor owned company. So just by saying that you made a great profit doesn’t really tell anything about mutuals performance, how well they were able to create value and benefits for their customer-owners. 

So actually, in one of our latest research articles that we published this year, we identified at least 10 or 11 different ways to communicate profit making, an economic value from the customer-owners perspective. And these reasons, they may include issues as strengthening the solvency buffer or developing the mutual company further. So different kind of issues. But great examples, great benchmark examples that we have, how this can be done? 

So, when reporting the performance of your mutual, remember to report the customer-owner perspective, not the investor-owner one. This provides you with an important tool to make mutuality and customer-owner nature of your company visible, not only to customer-owners, but to wider society as well as reporters or legislators. So it’s an important thing. It’s very important thing to remember. 

Number seven, cooperation with other mutuals enable localization and muscles in the same time. Cooperation bit with mutuals is something that is characteristically a very natural thing for mutual companies. For example, in many cases there are mutuals who serve specific regional communities. And that’s why they might be a bit smaller mutuals, and they need some muscles. So to achieve some muscles, it is convenient for them to collaborate with other regional mutuals who are not direct competitors. And this can be done for example through going to a central organization that is established to facilitate this cooperation and the central organization that can take the responsibility of such activities where the mutuals need muscle. And in the same time, the regional mutuals can take care of those activities that are better handled with a local touch. Okay. So localization and muscles in the same time. And this is a natural way for mutual companies. 

The same thing on the international level, because mutuals are … you are such a significant movement globally to be honest. You’ve got a little bit less than 1 billion policyholders, almost billion policyholders worldwide. You account for one third of the global premiums. So you are a significant movement. If you want to achieve a global impact in something in some issue, without a doubt, you can do it. You can achieve it, you are such a great movement. So you have the possibilities and tools to act on a local level through the local mutuals and coordinate these actions on an international level in a way that you achieve a global impact. And we have a huge amount of issues that needs global impact and local actions. Sustainability related issues, I believe pandemic is one thing, so there is a lot of work to do for your kind of movements and you have good possibilities and opportunities to be in the front line in tackling these challenges. 

So my message here is that national and international cooperation is a fundamental part of mutuality of mutual companies and it provides you significant opportunities to serve your customer-owners better on the local level, but also to achieve global level impact in issues that you find important. Very important thing.  

The number eight that I want to talk about is that your employees can be a truly powerful tool to gain competitive advantage for you. We can see that working for a mutual, when we’re talking about the employees, we can see that working for a mutual and understanding that this company is owned by the same community that employees are coming from, can create an additional sense of meaningfulness towards the job. So, there’s this powerful combination, if we think about how interesting employer mutual company is. So, there is a powerful combination if the economic reward is competitive and in addition, the employees sense a significant amount of meaningfulness towards the job by working for the good of their own community, even working to secure the future of their children and the future of their community. This is an issue that is brought up many times when I talk with people, directors of mutual companies, employees of mutual companies who are familiar with the mutual model. 

In addition to this, if you think about it, employees of a mutual are often characterized by so called triple role, which means that they act as employees, they act as customers as well as owners of the company in the same time. So, hugely powerful combination. So utilize these issues when you recruit people. One additional thing is that when we look at the mutuals internationally, so employees seem to have an important role in representing the values of mutual companies. For example, some mutuals may emphasize that recruiting policies need to reflect the values and characteristics or the diversity of the mutuals customer-owner community. 

It’s an important thing that we have noticed. While some other mutuals see it as an important thing to preach employ people, if there are people who have lost their jobs and they’re trying to find a new one, so mutual takes care in some way those people by bridge employing them, or they provide opportunities for young people in their own community via summer jobs. So they’re really embedded in the community and the community’s challenges. And so taking care of the customer-owner community and make it visible in this way as well, is seen important. 

Then number nine, digitalization is an opportunity. This may sound a bit general topic, but it does have a strong connection with the development of mutuality. Every now and then, I hear a claim that mutuals, we lose their competition to globally operating technology companies for example, because mutuals cannot scale up. There is just small players who cannot scale up or I may hear that mutuals lose because all the data is flowing in the future to new entrants, who are able to service consumers better, their needs better, maybe with more entertaining ways and so on. But in the same time, and I would like to say that when we look at digitalization and the characteristics it has, I think digitalization calls for arrangements that enable consumers to have ownership or claim ownership as well. 

One very obvious and highly discussed area the question of data ownership. Who owns for example the behavioural data that we collect from the insurance? When it comes to mutuals in this regard, you can always make the case by stating that since the company is owned by our customers, the data we collect is also owned by customers. Then you can even concretize this thing by developing some digital tools that concretize the control of the data for the customer-owners. Maybe they can control the data and decide through those tools how their data is utilized and so on. So this data ownership question is just one example among many others, but as a scholar, it seems to me that when I look at mutuals, it seems to me that digitalization should not be treated too much of a threat from your tools, but rather as a great opportunity, a great opportunity but what it needs is that mutuality and the nature of the insurance company is made visible and concrete for customer-owners. If it is not visible, it is not an advantage in the mind of the consumer. 

Make it visible if you want to get into the heads of the consumer. Then my final point today, number 10, make analysis and development of mutuality a systematic and continuous process and engage people. When you develop mutuality, make it a systematic process. This is because people’s ideas and mindsets change very slowly. So this is hugely important issue. The mindset changes very slowly, but then you also hear all the time there’s coming new people to the company. So you have to have a repetition in this process. It’s the same thing as with advertising. You need to be repetitive if you want people to understand what you’re saying, even if you want people to change their behaviour and mindsets. So you need to be repetitive. So make this process systematic. 

Also, one thing or one way to concretize the systematic nature of the process is to engage people into these processes, whether they are your employees, the customer-owner administration, or alternative directors, no matter who. But engage them, so they can be involved in developing the mutuality and thinking what mutuality means in our company. Because when people get to be part of these processes and truly think and develop mutuality related to their everyday responsibilities, it finally becomes a natural thing for them to analyze mutuality. They learn to take the mutual nature and ideas into account in every decision they make. So all in all, I think that these processes can be facilitated in many ways depending on the situation, but remember to make them … the processes systematic and engage people. 

Now, these were the 10 ideas for developing modern mutuality that I wanted to bring forward for you today based on our research, our observations. Many other ideas, issues, dimensions exist for sure and are important for mutuals as well, and I’m more than happy to continue these discussions with you, with each and every one of you in the future as well. But at this moment, I’m also would like to hear some … if you have questions that popped possibly into your mind during the presentation, I have been talking for quite a while right now. 

Ben Telfer: 

Thank you very much, Antti. That was a great overview of your 10 ideas. And as you said, it’s really great to get that academic and scientific perspective to balance with the practical examples that we have. Just a reminder that if you do have questions, please do submit them. We’ve got a few coming in already. So Antti, I’ll start with this one. Why do you think it is important to emphasize mutuality and its special characteristics and make them visible? 

Dr. Antti Talonen: 

Well, that’s a good question actually. That’s a very good question. I think all in all that the world is moving into a direction that calls for this kind of arrangement where people can be owners of a company as well. And that they’re dealing with companies who are in principle responsible, act sustainably. We can see for the past, if we look at the last year, from last autumn, and everybody who have been reading major business and economics magazines, Financial Times, Wall Street Journal, Economist and so on, we can see that even multinational companies, big investor owned companies are about to redefine, they want to redefine the corporate purpose, how we define the corporate purpose. And their idea is that the kind of thinking where the only responsibility of a company is to make profits and pay taxes from the profit, is an outdated one, even when we’re talking about investor owned companies. 

So I think in this kind of world, it’s just an amazing opportunity for mutuals to come on the front line and say that, “Hey, we have been here for at least 150 years as an institutional reform, and we’re characteristically responsible. We take care of the communities where we work in.” So I think the world is moving into a more mutual kind of society. And it’s a good opportunity for mutuals. 

Ben Telfer: 

And I bet that your research was done before the event since March and the new world we’re in at the moment. So in the post pandemic world, it’s an even bigger opportunity. 

Dr. Antti Talonen: 

Exactly. I think we definitely need some solutions that are in the post pandemic world, where we can achieve a global scale impact but then act locally. 

Ben Telfer: 

Excellent. Another question for you Antti. The idea of psychological ownership is powerful, but how does it compare with price? Customers may see value in being a member of a company and being an owner, but the most important driver is always price. How can mutuals change this? 

Dr. Antti Talonen: 

I think mutuals do have, the prizes … so it’s a funny thing because if I would work in a mutual company, I would make it visible that there’s so many different economic, or let’s say price related issues, that are not only the price. For example, as I mentioned in one slide, was that mutual company enables for the community that the assets that the company has, is in control of the community. And the mutual can serve the community also in capital supply sense. So, there are a lot of these economic dimensions or benefits that customer-owners from a mutual company can perceive, which are not only price, but it’s really important to make them visible. As I mentioned, there was about 10 or 11 issues that we identified in our research that relate to economic benefits, and it’s not only the price. So it’s important to make them visible. 

Ben Telfer: 

Have you got any successful examples of companies that have effectively communicated about their customer ownership? 

Dr. Antti Talonen: 

Yeah, we do. Actually, the research that we have done internationally, we have maybe five different scientific articles that we have written. Some of them are published already and they are about ICMIF members actually. So, we have been studying ICMIF members and it’s great to see that in many places, there are very good examples how these mutual companies in different parts of the world, different parts of the world, they are bringing up successfully the customer ownership. Some mutuals may be good in bringing up something and then some other mutuals bringing up something else. And it has been very interesting to collect these ideas together in our research. Actually, if we were going to be talking about these in the future, we have lots of benchmarking data in a way about these ways to put customer ownership forward. 

Ben Telfer: 

Thanks Antti. Moving on now to a bit on question about governance, do you have any examples of how to involve members in voting or governing the mutual using recent technologies? 

Dr. Antti Talonen: 

Not too many to be honest. I think that’s one area where mutuals could put much more emphasis in. The first thing is that I would make it much more visible the idea that the customer-owners or members, member owners, they have the possibility to participate in decision making. So there might be a lot of customer-owners who don’t even know about these possibilities. But then these digital tools, they could give some good ways to enhance these processes as well. But we don’t have so many good examples of those tools yet. So, it’s a good development idea. 

Ben Telfer: 

Very good question. Still time I think for a couple more questions. How should a mutual company handle the rating of its most risky clients and still maintain mutual ideas in the sense of serving a community? How can we be seen to serve a community when we charge some members of that community much more than other community members? 

Dr. Antti Talonen: 

If I take the answers straight from the academic research that has been done about this issue because this relates quite a lot with the moral hazard questions and symmetry of information, so the big idea and the research for many years has been that mutual could act as a tool to decrease people’s moral hazard, the level of moral hazard. And in a way that when people really understand that this is their own company, these company secures the future, so that in a way influence their behavior. I’m not sure if it’s like this, but this is the idea that has been put forward. It’s just the one example. 

Ben Telfer: 

Thank you Antti. Another excellent question there. So one more question for you Antti, how can we develop the research on mutuals even further? Is there something that mutuals and associations can be doing in this regard? And how can we engage these academic and the insurance scholar community in a better way and more widely? 

Dr. Antti Talonen: 

Yeah, that’s an excellent question. We have a huge need to develop research on a mutuals further. Before today, we were talking about the significance of mutual movements in the world. It’s a really significant movement, mutuals are big players, but then at the same time, we have quite a small amount of research on mutuals at the moment. Actually, I just want to tell you here that when I did my PhD, I made a literature review as well, where I tried to see what has been written before me about mutuals. And I identified 69 articles. The first one was written in 1951, and the last one in my literature review was written in 2015. 

So if I divide those articles, on average, there was one article per year published. And we have so small amount of research. So we have to boost the research, and maybe the thing was, if I should give a message to the mutuals, the representatives of mutual companies, is that when you go to … when you discuss with the academic communities in your local … with your local academic communities, encourage them to start looking at mutuals. And if you have a possibility to even financially support them in form of some research project or something, do that. But the first thing is that encourage them, tell them that this is a very under researched area, and we should get more research. So, this kind of encouragement would be an important thing. And for example, my contact information can be shared. I’m more than happy to help in this regard as well. 

Ben Telfer: 

Excellent. Thank you Antti. I’ve just put that back on screen for everyone in the audience. We’ve just had a couple more questions in but I will follow up with you afterwards Antti on that. And your thesis and all your research is widely available to ICMIF members. That’s where they can just visit the links on the slide deck? 

Dr. Antti Talonen: 

Exactly. Please do, yeah. 

Ben Telfer: 

And if not, please do get in touch with either myself or Antti and we are happy to share that with you. So thank you very much Antti. It was great for you to join us today. I really appreciate you sharing those 10 ideas with us. ICMIF was very pleased to partner with you again, as you said before, we’ve supported the various events that you’ve held over the last couple of years and hope to continue to do so in the future. Thank you everybody for watching. A final thank you to Antti and thank you everybody for joining and for your excellent questions.  


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