Shaun Tarbuck, Chief Executive of ICMIF, the International Cooperative and Mutual Insurance Federation, comments on the growth in market share among Mutual Insurers, as reported by Swiss Re in a recent Sigma Report.  He sees three main reasons for the expansion: Trust, Improved Marketing, and greater customer awareness of alternatives that are “mutual.”

Mr. Tarbuck also address challenges Swiss Re sees for Mutuals in new ‘risk-based capital’ requirements and evolving governance standards. Mr. Tarbuck sees it as Solvency and Governance issues.  He notes that Swiss Re pints to small and middle sized companies as being challenged by the risk-based capital model.  He suggests “proportionality” tests should be implemented within nations based on the business models in each country. ICMIF has produced guidelines to help regulators understand the Mutual Insurance sector.

With regard to Governance, Mr. Tarbuck says “Board Balance” and independence are important, as are checks balances on Board membership, and the right representation of the respective affinity group.  While he notes that Mutuals around the world are at different stages in the Governance development, man are “best in breed among all insurers.” With regard to “Gender Balance”, he says Mutuals are ahead of the industry average (17%) with 21% of Mutual Board members being female, on average, and 18% of Mutuals with a female CEO.  He suggests that problems in Governance are more prevalent in the shareholder-based insurance sector rather than the Mutual sector.

Looking at data and technology, Mr. Tarbuck says “Big Data” allow companies to get closer to their customers, to understand their needs, to be customer centric…these are things Mutuals have always done. Social media, smart analytics, coupled with customer engagement enable Mutuals to tailor products focused on customer wants. He says the “Uberficiation” of insurance happened 300 years ago with risk pooling.  People sharing risks is the Mutual sector. He sees opportunities for Mutual Insurers in areas like healthcare, long term care, and pensions as governments pull back from them. He also sees opportunities for the “mutualization” of risk in peer-to-peer groups that are emerging, like Lemonade and Guevara.

ICMIF launched the 5-5-5 Mutual Microinsurance Strategy in early 2015 to help build resilience in vulnerable communities.  ICMIF and its members are focused on 5 countries with 5 million families that in 5 years will access to resilience insurance for natural disasters and climate change. Efforts have begun in India and the Philippines.  ICMIF plans to initiate efforts in Colombia, Kenya and Sri Lanka early in 2017. Mr. Tarbuck sees a 2-way learning curve in countries who are beginning to understand how Mutual Insurance works and employing practices within their own communities.

With the annual NAMIC Convention convening in Vancouver, Mr. Tarbuck sees challenges for NAMIC members around “scale” and “proportionality” on regulations, and digitization. He also sees challenges in selling insurance to Gen Y and millennials through traditional means.  Mutuals that are already looking to sell products in new wats will be the winners in the long run.

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