Climate-related risk is increasing, while insurance is slow to develop, hence a growing protection gap. The high levels of customer trust enjoyed by mutual insurers present an opportunity – even a responsibility – to fill that gap.

IAIS standards incorporate the proportionality principle, which takes into account the nature, scale and complexity of each business, but supervisors need to better understand the cooperative/mutual model. The IAIS’s application paper (on Mutuals, Cooperatives and Community-based Organisations) released in September 2017, explains how the cooperative/mutual model is considered in matters relating to capital requirements, licensing, governance issues, portfolio transfer, etc.

Proportionality is even more important to microinsurance. Globally, five billion people have no form of social protection; insurers, regulators and supervisors all have a role to contribute to economic growth, requiring a sound regulatory approach and insurance system. Ongoing dialogue between the industry and regulators will be crucial to this.