This new report, by AM Best, reflects that mutual insurance companies generally entered and emerged from the economic downturn in a strong position, but indicates that any advantage over conventional insurers may be short-lived as economies around the world continue to recover. From their perspective AM Best see that limited financial flexibility, impending implementation of Solvency II rules in Europe, growing regulatory requirements and imperatives to cut expenses will place pressure on the mutual sector, resulting in further partnerships and affiliations.
The previous report published by AM Best and looking at the mutual sector; ‘Mutuals under the Microscope as Market Share Grows’, was published in late 2009 and found that mutuals had then increased their market share during the financial turmoil. Six months on from the work undertaken to prepare that report a further review of the market shows that mutuals in the main remain well capitalised and are frequently in a stronger position than ‘non-mutual insurers’. The report is essential reading for anyone operating in the mutual and cooperative insurance sector and a copy of the new report can be found by clicking here. The previous AM Best report can also be viewed for reading or downloading at the same link.