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, says a new report from ICMIF Supporting Member EY.
According to the EY Global Mutual Insurance Market Scan 2024, mutuals will only become more important as new risks emerge, presenting more potentially severe threats. The report says 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 report highlights the megatrends and major business drivers which are shaping the market today. The report was launched by Isabelle Santenac, Global Insurance Leader, EY, as part of her keynote presentation in the opening ceremony of the ICMIF Biennial Conference in November 2024 in Buenos Aires (Argentina).
According to EY’s research, these forces include:
- Mounting cost pressures
- Intensifying regulatory scrutiny
- Rising customer expectations
- The need for digitisation
- Capital strategies for investing in growth
In the report, EY also provides recommendations for mutuals that are looking to balance their traditional purpose with the need to maintain financial strength. Those actions include:
- Enhancing engagement models to maximise the benefits of mutuality for members, considering best allocation of profit return, including enhanced value propositions, loyalty discounts, dividends, education and community programmes
- 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 digitisation, personalisation 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 in the report were first outlined in EY’s previous study, completed in 2021, which aimed to identify what sets mutual and cooperative insurers apart from stock carriers. At that time, EY specifically explored how mutuals can devise and operationalise purpose-led strategies as a means to differentiate their brands, win market share and accelerate growth. In 2024, EY has refreshed and deepened its insights on the mutual sector.
Overall, EY believes this year’s findings confirm a strong belief that mutuality provides an essential point of differentiation. However, EY warns its extent and sustainability are not necessarily certain, given cost and profitability pressures, regulatory trends and other market forces. However, increasing consumer scepticism toward large corporations (and financial services firms in particular) provides even more reason to believe that mutuality will continue to provide a competitive advantage.
EY says its purpose of building a better working world aligns closely with the mission of the mutual insurance sector. Download the report here.
ICMIF members can request a link to watch the presentation by Isabelle Santenac here.
