Mutual and cooperative insurers remain a critical pillar of the global insurance industry, offering vital protections to individuals, families, businesses and communities around the world. Mutuals will only become more important as new risks emerge, presenting more potentially severe threats. Mutuals can also provide leadership as the industry is increasingly challenged to balance profitability with its noble purpose of providing protection.

This report covers the findings of EY’s most recent research into the global mutual insurance sector, conducted in partnership with the International Cooperative and Mutual Insurance Federation (ICMIF). Beyond the snapshot view of the current mutual insurance landscape, the following pages highlight megatrends and major business drivers shaping the market today.

Those forces include:

• Mounting cost pressures
• Intensifying regulatory scrutiny
• Rising customer expectations
• The need for digitization
• Capital strategies for investing in growth

We also provide recommended actions for mutuals looking to balance their traditional purpose with the imperative to maintain financial strength. Those actions include:

• Enhancing engagement models to maximize the benefits of mutuality for members, considering best allocation of profit return, including enhanced value propositions, loyalty discounts, dividends, education and community programs
• Upgrading the technology infrastructure as the foundation for innovation in a data-driven and digital world, where generative artificial intelligence (AI) is poised to play a transformative role across the industry
• Embracing leading practices for cost management, moving to leaner and more flexible cost structures where appropriate to protect the mutual business model and to deliver for members in their times of need
• Enriching the portfolio of offerings through digitization, personalization and loss prevention to reflect the evolving needs and preferences of members
• Enhancing the employee value proposition to attract younger workers and bridge a growing talent gap as experienced workers retire.

The principles of mutual differentiation highlighted on the following pages were first outlined in a previous EY study, completed in 2021, which aimed to identify what sets mutual and cooperative insurers apart from stock carriers. Specifically, we explored how mutuals can devise and operationalize purpose-led strategies as a means to differentiate their brands, win market share and accelerate growth. In 2024, EY have refreshed and deepened our insights on the mutual sector.

Overall, this year’s findings confirm a strong belief that mutuality provides an essential point of differentiation. However, its extent and sustainability are up for debate, given cost and profitability pressures, regulatory trends and other market forces. Increasing consumer skepticism toward large corporations (and financial services firms in particular) provides even more reason to believe that mutuality will continue to provide a competitive advantage. Thus, the challenge for most mutuals is likely to be one of tactical execution, including maximizing the impact of capital returned to members. Doubling down on mutuality’s competitive advantage is a viable strategy, provided mutuals and cooperatives can navigate some of the formidable challenges facing the industry as a whole. Choosing the right investments to improve their overall effectiveness and efficiency will also help mutuals unleash innovation and growth.

EY’s purpose of building a better working world aligns closely with the mission of the mutual insurance sector. EY are delighted to partner with ICMIF and proud to serve many mutual and co-operative insurers worldwide in providing unique value for their members.