New research from the International Cooperative and Mutual Insurance Federation (ICMIF) highlights that 45% of the world’s countries do not have a local law that allows mutual or cooperative insurance.
A new infographic produced by ICMIF, Access to mutual and cooperative insurance, illustrates that these countries where there is no mutual/cooperative insurance law represents 9% of the world’s Gross Domestic Product (GDP). The aggregate population of people living in these countries represents 16% of the world’s total.
The research also suggests that it is people in low income countries around the world that have the least access to mutual/cooperative insurance, as 63% of low income countries (as classified by the World Bank, 2016) have no mutual/cooperative law. In comparison, only a third of countries classified as high income have a legal or regulatory environment that does not allow mutuals or cooperatives to write insurance.
In population terms, the disparity between those living in high and low income countries is even more pronounced: only 6% of people living in high income countries do not have access to mutual/cooperative insurance, compared to 64% in low income countries.
ICMIF CEO Shaun Tarbuck said: “We believe that the cooperative and mutual insurance business model is not sufficiently understood by policymakers, regulators or commentators. It is now time for ICMIF and our members to work closely with them and develop a common knowledge and better understanding.
“In 2015 ICMIF launched its first Global Manifesto: Protecting lives and livelihoods in which we call upon global, regional and national institutions to play their part in ensuring an appropriate business environment for cooperative and mutual insurance. Cooperative and mutual insurers are important to the people that they serve, but they are also a crucial pillar of the world’s financial services industry. Many nations and states recognize their contribution to the stability and wellbeing of economies, but there are places across the globe where there is insufficient or no legislation in place to allow cooperatives and mutuals to make their full contribution. This infographic shows that we have some way to go but we are certainly aiming to meet this challenge head on. We have seen the great news that China last month granted licences to the first three mutual insurers in the country. ICMIF and member organization the MGEN Group (France) have acted as advisors to the Chinese Insurance Regulatory Commission (CIRC) on mutual insurance and regulation.
“More than 950 million people worldwide are served by mutual or cooperative insurers. It is the fastest growing part of the insurance sector but we still have to address these areas where our model does not yet have adequate legislation to allow it to function. Domestic legislation and regulation everywhere can and must be brought up to the highest standards that exist in some countries to ensure that the existing and potential mutual and cooperative insurance customers are not disadvantaged,” concluded Tarbuck.