Mutual insurers outpace wider insurance sector

07 May 2013

The mutual and co-operative sectors in the USA, the UK, Canada and Europe are consistently and significantly outperforming the rest of the insurance market, according to researchers at the International Cooperative and Mutual Insurance Federation (ICMIF).

ICMIF’s shared intelligence department is publishing a series of Market InSights reports, based on growth trends since the onset of the global financial crisis in 2007. The first four focus on three of the largest global insurance markets; the UK, US and Canada, plus the regional market of Europe.

The ICA’s sectoral body for co-operative and mutual insurers said the financial crisis has had a profound negative effect on all of these markets, with the exception of Canada. The mutual sector, it said, has shown remarkable resilience and significant growth in all four areas.

The Markets InSights Europe report said that mutual insurance accounts for over a quarter of the market in five of the ten largest European markets. Despite turbulence in the Eurozone, European mutuals have grown their premium income year-on-year since the onset of the crisis.

Between 2007 and 2011, they achieved a 15 per cent growth in premiums, while the total regional market shrank by eight per cent, down from EUR1.29 to EUR1.18 trillion. As a result, the mutual market share increased by a quarter, up from 22.6 per cent in 2007 to 28.1 per cent in 2011. The region’s share of global premiums dropped from over 42 per cent to 35.9 per cent.

In the US, mutual insurers increased their market share from 29.5 per cent in 2007 to 34 per cent in 2011, driven by a growth in market share by life mutuals. Premium volumes in the entire market were 1.3 per cent lower in 2011 than they were in 2007, but mutuals grew their premium income by 13.5 per cent.

The US share of the global insurance market fell from 30 to 26.6 per cent. The country’s top three mutual insurers, State Farm, with a premium income of USD 52,594 million, Liberty Mutual Insurance, with USD 26,659 million, and Farmers Insurance Group, with USD 17,621, all grew their premium income between 2010 and 2011.

UK mutuals increased their premium volumes by a massive 38 per cent between 2007 and 2011, while premiums for the total market decreased by 28 per cent. As result, mutuals’ market share almost doubled from 4.3 per cent to 8.2 per cent.

Mutual insurers’ total assets in the UK were worth GBP126.5 billion in 2011, up 5.5 per cent on the previous year. The Market InSights UK report says British mutuals’ long-term investment strategies have led to consistent asset growth since 2008.

The Canadian insurance market has weathered the global financial crisis relatively well, the Market InSights Canada report says. Total premiums were 10.6 per cent greater in 2011 than before the crisis, again driven by life mutuals’ growth.

This growth was higher than the collective 5.2 per cent premium increase in mature insurance markets, and far better than the premium volume decrease experienced in the US, the UK and France, whose market shrank by 0.4 per cent between 2007 and 2011.

The mutual sector in Canada has, like its European, British and American counterparts, outperformed the non-mutal sector. Its 2011 market share was 19.5 per cent, up from 16.3 per cent in 2007.

• The first four InSights reports from the ICMIF will be followed by reports on Latin America, Germany, Spain and the Nordic markets. For more information visit: www.icmif.org

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