Mutual and cooperative insurers are built to last, according to latest ICMIF research

Tuesday, 14 June 2016

The world’s 500 largest mutual/cooperative insurers have been writing business for, on average, 93 years each, according to the latest research from the International Cooperative and Mutual Insurance Federation (ICMIF).

Not only is the mutual/cooperative sector demonstrating impressive longevity but it is also recording success in terms of premiums and growth. Of these 500 largest mutual and cooperative insurers, 376 (or 75%) reported positive premium growth in 2014, and 18% (90) registered double-digit growth in 2014.

These findings are shared in the eight edition of ICMIF’s annual Global 500 report, an analysis of the world’s 500 largest mutual and cooperative insurance companies ranked by 2014 premium income.

The report is published for ICMIF members annually alongside the publicly available Global Mutual Market Share, ICMIF’s market intelligence report on the size and financial performance of the global mutual and cooperative (published in March 2015).

Sustainability, solidarity and reliability

The findings of ICMIF’s research reinforce the theory that mutual and cooperative insurers are closely associated with sustainability, solidarity and reliability.

The world’s 500 largest mutual insurers companies have each been writing business for, on average, 93 years.

Furthermore, 213 (equivalent to 43%) of Global 500 insurance organizations have been in operation for 100 years or more, 64 (or 13%) have been in business for 150 years or more; and 10 companies (2.5%) were over 200 years old.  Just under 100 (equivalent to 20%) of Global 500 companies were founded between 1892 and 1916 (inclusive) and have therefore been in business between 100 and 124 years.

However, it was not just some of the world’s oldest insurance companies which featured among the largest mutual insurers in the 2014 data; 37 of the Global 500 companies are much younger, having been in business for less than 25 years.

Some trends in longevity were noted for different organizational structures.

  • Around 80% of companies which have been conducting business for over 100 years were “mutual” insurers;
  • The average age of “mutual” insurers in the Global 500 was 101 years old.
  • Friendly societies and fraternals were amongst the oldest companies, with an average age of 137 and 126 years respectively.
  • The average age of the 13 P&I clubs was 131 years.
  • In comparison, cooperative (67 years) and non-profit (63 years) insurers were a relatively recent model of business.
  • Takaful insurance was by far the youngest form with the five Takaful insurers in the Global 500 having an average age of just 23 years.

Commenting on the findings from the Global 500 report, ICMIF CEO, Shaun Tarbuck said: “Mutual/cooperative insurers represent 27% of the total market. Our role in the market is to keep pricing fair, standards high and offer a choice to consumers.

“Our business model evolved as a result of social needs that were not being met by stock companies and we continue to meet those needs today. We have seen as increased premium income of 30% since 2007 compared to stock insurers who saw a 14% increase so today’s consumers are continuing to demonstrate the validity of our proposition,” concluded Tarbuck.