Europe’s mutual sector has demonstrated the sustainability of its model amid an increasingly challenging operating environment, according to a new report from ICMIF Supporting Member AM Best. As regulatory and competitive pressures increase, European mutuals have used a variety of structures in their attempts to gain scale, resulting in the creation of leading groups in various markets.
A new Best’s Market Segment Report, “Mutuals Embrace Innovation to Cement Their European Insurance Market Role” outlines the extent to which larger mutuals in particular have looked to enhance their competitive positions with ongoing investments in their business.
The report notes that over recent years, Europe’s mutuals have focused their efforts on maintaining strong access to their customer base and enhancing the quality of services they provide. This focus has translated into sustained investment in IT systems and the enhancement of their digital presence, a trend that the COVID-19 pandemic has significantly accelerated. These efforts help maintain the strong relationship between mutuals and their members, which is crucial to the long-term success of the segment.
Key takeaways in this report include:
- The mutual sector has demonstrated the sustainability of its model amid an increasingly challenging operating environment. Mutuals, especially larger ones, have looked to enhance their competitive positions with ongoing investments in their business.
- As regulatory and competitive pressures increase, European mutuals have used a variety of structures in their attempts to gain scale, resulting in the creation of leading groups in various markets.
- In line with their ethos to operate for the benefit of their members, European mutuals tend to report marginal profitability compared with stock companies.
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