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If the UK insurance industry were one big family, then you can say it’s the mutuals that are making mum proud. A recent study shows the mutual insurance sector outperformed the rest of the British cover market last year.
Published by the International Cooperative and Mutual Insurance Federation (ICMIF), in partnership with the Association of Financial Mutuals (AFM), the Market InSights: UK 2016 report noted nearly a 10% rise in insurance premiums for mutuals – from 2015’s £17.8 billion to 2016’s “post-crisis record level” of £19.6 billion. According to ICMIF, the sector posted a market share gain of more than one percentage point over the previous three years.
In fact, growth in the sector exceeded the average market growth in six of the previous nine years, with its 2016 share of the total UK market being at its highest level since the 1990s. The figure went up to 8.7% last year, compared to only 4.4% market share in 2007.
As for employee and policyholder numbers in 2016, there were an estimated 27,000 people employed by approximately 100 mutual insurers serving 30.7 million members or policyholders. The 100 figure includes not-for-profit insurers.
“The five largest mutual insurers by assets represented 83% of the total assets of the mutual sector,” read the report. “Royal London, the largest mutual in terms of premium income, continued as the largest mutual ranked by total assets, contributing more than half (£90.6 billion) of the mutual sector’s total.”
It also noted that composite insurers NFU Mutual and LV= both held assets of over £15 billion in 2016. Meanwhile, according to the report, life insurers Equitable Life – in run-off – and Wesleyan were the only other two mutuals with assets in excess of £5 billion.
“The results in the latest Market InSights UK report prove how resilient the UK mutual insurance sector is now,” said AFM chairman and The Exeter chief executive Andy Chapman. “In the last 10 years, while the UK insurance market has lost £1 in every £6 of premium income, amongst mutuals, we have grown premiums by two-thirds.”
ICMIF chief executive Shaun Tarbuck commented: “Now that we are approaching the 10 year anniversary of the onset of the global financial crisis, it is especially encouraging to see that UK mutual insurers are continuing to grow, and at a faster rate than the rest of the market.”
“The consistent growth in market share is very positive, but more so is the growth in membership numbers for our sector,” continued Tarbuck. “Over the previous five years, there has been a 13% increase in the number of members or policyholders of mutual insurers, highlighting that in the backdrop of political and regulatory uncertainty, the UK consumer is recognising the benefits of being protected by a mutual, especially in terms of their life insurance and savings business.”
Chapman added: “The sector continues to promote its consumer-focused credentials, and is lobbying for rule changes that level the playing field and help maintain our impressive recent growth.”
ICMIF is the global representative body of the cooperative and mutual insurance sector, while AFM is the UK trade body that represents mutual and not-for-profit insurers, friendly societies, and other financial mutuals.
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