Estonia market now open for establishment of mutual and cooperative insurers

9 March 2019


The International Cooperative and Mutual Insurance Federation (ICMIF) has this week welcomed the news that the Estonian Parliament Riigikogu has introduced an Amendment to the Estonian Insurance Activities Act, which has now expanded the types of insurance company structure which are permitted in Estonia. The Amendment means that both insurance associations (a type of mutual insurer), and European cooperative societies will be recognised as of 2 March 2019. The Amendment will allow mutual and cooperative insurance in Estonia for the first time in just under 80 years.

Before this Amendment came in to force Estonia was one of few countries in the European Union which did not permit mutual or cooperative insurance. Mutual insurance was originally present in Estonia from 1851 up to 1940 when it was no longer permitted.

In 2018 the Association of Mutual Insurers and Insurance Cooperatives in Europe (AMICE) and ICMIF co-published a study of the mutual and cooperative insurance sector in Europe: Facts and figures: Mutual and cooperative insurance in Europe Vol 2. The report contained an analysis of the landscape and evolution of the European mutual and cooperative insurance industry in 2015 and noted that, at that time, Estonian insurance law did not permit the establishment of mutual or cooperative insurers. In 2015 there were two mutual/cooperative insurers active in Estonia but these were subsidiaries of foreign companies. There were no mutual or cooperative insurers in the legal form present in Estonia in 2015 according to the Facts and figures report.

In January 2018, a process began to update Estonian Insurance Law because there was a strong belief held by some that there was a gap in the Estonian insurance market which the mutual sector could fill. Now mutual insurance has been reinstated in law after the 3rd reading and vote in Parliament on 30.01.2019.

Latest statistics from the ICMIF Global Mutual Market Share 10 report confirm that the mutual/cooperative insurance sector held 32.7% of the European market in 2017. Over the last ten years, according to the report, the European mutual market saw growth in premiums of 14.8% (whereas the total market shrank by -14.8%). It is hoped that the Amendment to the Insurance Activities Act will drive a greater choice of insurance providers, based on the member-owned business model, for Estonian customers to choose from.

Catherine Hock, Vice-President, International Relations, ICMIF, said, “We are delighted to see the reintroduction of the mutual legal form for insurance in Estonia 80 years after its disappearance,  when its market share was about 40%. We expect that, just like in the rest of the world, Estonian mutual insurers will contribute to increased consumer choice and greater levels of trust; product and service innovation; and fair pricing.

For member-only strategic content on the cooperative/mutual insurance sector, ICMIF members have exclusive access to a range of online resources through the ICMIF Knowledge Hub.

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