Over recent months Belgian cooperative insurer P&V Assurances, a member of the International Cooperative and Mutual Insurance Federation (ICMIF), has used a number of ways of raising new capital. Some has come from existing (institutional) cooperators and other organisations and some from a more recent public issuing of capital to customers, staff and tied agents. Hilde Vernaillen (pictured), CEO of P&V Assurances and its associated brands VIVIUM and ARCES, is also Chair of the ICMIF Board of Directors and a true champion of the cooperative and mutual insurance sector.
Before these new measures to raise capital were initiated the cooperative generally maintained low capital levels (around EUR 511,000 euros) but kept high reserves (EUR 2 billion). In June 2018, P&V raised EUR 44.9 million of new capital from a number of the organisation’s historic cooperative partners. These included workers’ unions and health mutuals as well as two French mutual insurers, Macif and MAIF.
Then in July this year, P&V raised an additional EUR 390 million through a ten-year subordinated bond, which these same historic partners subscribed to. Of these EUR 390 million, EUR 160 million was classed as new money and EUR 230 million came from earlier loans which had been issued in 2008-2009 (to overcome the then financial crisis) and in 2012 (to buy VIVIUM shares which Macif and MAIF purchased in order to support P&V back in 2007).
Speaking recently to Belgian newspaper L’Echo, Hilde Vernaillen said that these operations “strengthen our capital base, stabilize our solvency (note, before these transactions, the ratio was 175%) and allow us to address possible future fluctuations, because solvency ratios are subject to a lot of variation in recent times.”
“These financial contributions also make it possible to self-finance future growth,” added the CEO in her interview with L”Echo. “We are not listed on the stock exchange, which has the big advantage of allowing us to work with a long-term view, but that also means we have to ensure our own financial base.”
A third initiative is currently underway at P&V with the opening of the cooperative’s capital to customers, staff and agents. The insurer has not set itself a financial target for the issue of these EUR 1,000 “C shares” and is not expecting a large take up of the shares. Instead the main aim is to bring about a cooperative revival. Hilde Vernaillen told L’Echo that “The idea here is mainly to revive our cooperative in the most important sense, which is to say that we are owned by our stakeholders and our members. We want to engage more customers and to involve them in the life of the company.” For example by creating discussion groups on prevention or to look at the “co-creation of new products”.
Source: This article is based on a feature published on L’Echo on 12 October 2018.