Mutual insurance explained

A mutual insurance company is an insurance company owned entirely by its policyholders. It is a form of consumers' co-operative. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or reduced future premiums. In contrast, a stock insurance company is owned by investors who have purchased company stock; any profits generated by a stock insurance company are distributed to the investors without necessarily benefiting the policyholders.

History

The concept of mutual insurance originated in England in the late 17th century to cover losses due to fire.^[1] The mutual/casualty insurance industry began in the United States in 1752 when Benjamin Franklin established the Philadelphia Contributionship for the Insurance of Houses From Loss by Fire. Mutual property/casualty insurance companies exist now in nearly every country around the globe.^[2]

The global trade association for the industry, the International Cooperative and Mutual Insurance Federation, claims 216 members in 74 countries, in turn representing over 400 insurers.^[3] In North America the National Association of Mutual Insurance Companies (NAMIC), founded in 1895, is the sole representative of U.S. and Canadian mutual insurance companies in the areas of advocacy and education.^[4]

Recent developments in the United States

The "mutual holding company" structure was first introduced in Iowa in 1995, and has spread since then.^[5] There have been concerns that the mutual holding company conversion is disadvantageous for the owners of the company, the policyholders.^[6] The major disadvantage of mutual insurance companies is the difficulty of raising capital.^[7]

In the 111th Congress, Carolyn Maloney sponsored a bill that she claimed would have protected mutual holding company owners. The measure,, died in committee.

Mutual holding companies are one way to undergo privatization, also called demutualization.

List of mutual insurance companies

Multinational

• Association Internationale de la Mutualité

Bermuda

• Oil Insurance Limited

Denmark

• Tryg (owned 60% by the mutual company Tryghedsgruppen)
• Lærerstandens Brandforsikring^[8]

Faroe Islands

• The Faroe Insurance Company (Tryggingarfelagið Føroyar)

Finland

• Pohjantähti Mutual Insurance www.pohjantahti.fi
• Mutual Insurance Company Turva www.turva.fi

France

General Mutual insurance companies

• Groupama
• MACIF
  • Matmut
• MAAF
• MMA
• SMACL
• Thélem Assurances
• Mocf
• Mutlog

Health insurance companies

• ACORIS Mutuelles
• Almutra
• Avenir Santé Mutuelle
• Choralis Mutuelle le libre choix
• Complévie
• CMIP
• EMOA Mutuelle du Var
• Groupe Victor HUGO
• La Maison du Fonctionnaire
• La Mutuelle Catalane
• La Mutuelle des Remparts
• MBA Mutuelle
• MCEN
• M Comme Mutuelle
• MFCF
• Mutuelle Entrain
• Mutuelle Générale d'Avignon
• Mutuelle Générale des Cheminots
• MIPSS Auvergne
• MOAT
• Mutuelle Matra Hachette
• Mutuelle du Pays Martégal
• Mutuelle du Pays de Vaucluse
• Mutuelle du Rempart
• Mutuelle SEPR
• Mutuelle SERAMM
• Mutuelles du Soleil
• Precocia
• Sereina Mutuelle
  • Mutualia
• Mutuelle Générale
• Harmonie Mutuelle*
• MNT

Germany

• Arbeitsgemeinschaft der Versicherungsvereine auf Gegenseitigkeit e.V.
• VERBAND DER VERSICHERUNGSVEREINE

Japan

• Asahi Mutual Life Insurance Company
• Meiji Yasuda Life Insurance Company
• Nippon Life Insurance Company
• Sumitomo Life Insurance Company

New Zealand

• FMG Insurance
• MAS

Philippines

• Insular Life

Slovenia

• Vzajemna

South Africa

• PPS (Professional Provident Society)^[9]
• Iemas^[10]
• AVBOB^[11]

Spain

• Mutua Madrileña

Sweden

• Alecta
• Dina Försäkringar
• Folksam
• Länsförsäkringar
• Skandia

United Kingdom

• Shepherds Friendly Society
• Education Mutual
• The Equitable Life Assurance Society
• Exeter Friendly Society
• NFU Mutual
• Engage Mutual Assurance
• Health Shield
• Royal London Group
• Together Mutual Insurance
• The Military Mutual
• Scottish Friendly
• UIA Mutual

United States

See also

• Reciprocal inter-insurance exchange – a type of insurance company which, similar to a mutual, is not owned by stockholders.
• Protection and indemnity insurance

Further reading

• Emery, Herbert, and George Emery. A Young Man’s Benefit: The Independent Order of Odd Fellows And Sickness Insurance in the United States and Canada, 1860–1929 (McGill-Queen's University Press, 1999).
• Van Leeuwen, Marco H.D. Mutual Insurance, 1550–2015: From Guild Welfare and Friendly Societies to Contemporary Micro-Insurers (Palgrave Macmillan, 2016) 321 pp. online review, A standard scholarly history

External links

• NAMIC – National Association of Mutual Insurance Companies
• ICMIF – International Cooperative and Mutual Insurance Federation
• AFM – Association of Financial Mutuals (UK)
• University of Wisconsin Center for Cooperatives: Research on the Economic Impact of Cooperatives. Economic Impacts of Cooperatives › Financial Services > Mutual Insurance

Notes and References

1. Book: Wright, Janet. The History of the National Association of Mutual Insurance Companies, A Century of Commitment, 1895–1995. 1994. National Association of Mutual Insurance Companies. Indianapolis, IN. 1–5. Virginia Wadsley . Janice Artandi .
2. Web site: Association of Mutual Insurers and Insurance Cooperatives in Europe. AMICE. 24 February 2011.
3. Web site: ICMIF Members list. March 5, 2010. dead. https://web.archive.org/web/20110203195346/http://www.icmif.org/members. February 3, 2011.
4. Book: Wright, Janet. The History of the National Association of Mutual Insurance Companies, A Century of Commitment, 1895–1995. 1994. National Association of Mutual Insurance Companies. Indianapolis, IN. 21. Virginia Wadsley . Janice Artandi .
5. Banstetter et al. (1997). The Mutual Holding Company: A New Structural Option. The Association of Life Insurance Counsel. pp 65-140
6. Rambeck R. (2001). Mutual Holding Company: A Shell Game Without the Pea. Insurance Journal.
7. http://www.insure.com/articles/lifeinsurance/demutualization.html What demutualization means for policyholders
8. Web site: Om LB Forsikring A/S.
9. Web site: About PPS - Our Heritage | Mutual Financial Services Exclusively for Graduate Professionals . 2014-12-17 . dead . https://archive.today/20141217182216/https://www.pps.co.za/pages/about/our-heritage.php . 2014-12-17 .
10. Web site: Overview . 2014-12-17 . dead . https://web.archive.org/web/20141217115558/http://www.iemas.co.za/index.php/who-we-are/who-we-are-2 . 2014-12-17 .
11. Web site: AVBOB – Home Page. avbob.co.za.