As technology continues to advance at a rapid pace, it introduces revolutionary platforms that foster direct connections between individuals and communities, transforming various industries, including the risk transfer (insurance) sector, and revitalising the mutuals and co-operatives landscape.
Disrupting the Traditional Insurance Model
We’ve closely observed the emergence of entities like lemonade.com, disrupting the traditional insurance model by treating premiums as the policyholder’s money, embracing simplicity, transparency, and altruism.
“Lemonade reverses the traditional insurance model. We treat the premiums you pay as if it’s your money, not ours. With Lemonade, everything becomes simple and transparent. We take a flat fee, pay claims super fast, and give back what’s left to causes you care about”
Unlocking Potential with Nexus Mutual
Reducing Frictional Costs with Mutuals and Co-operatives
One of the challenges in the insurance industry is the comparatively high level of frictional costs. These are commonplace and range from insurance broker and managing general agent (MGA) fees and commissions through to corporate insurer profit margins. The frictional cost environment in a mutual or cooperative typically benefits from members dealing directly with their mutual, along with the absence of third-party shareholders.
Beyond the competitive advantage this grants, the community-focused values and objectives of mutuals and co-operatives resonate deeply with customers, adding another layer of appeal. Consequently, buyer sentiment is shifting towards the mutual and cooperative sector, evident in ICMIF data showcasing its outgrowth compared to the overall insurance marketplace (icmif.org/global-mutual-market-share-2023/).
Revitalising the Mutuals and Co-operatives Sector
Creating Bespoke Mutuals for Specific Needs
Technology is also enabling these mutuals and co-operatives to strengthen and broaden their member engagement and deliver operating efficiencies through enhanced levels of process automation. Nexus Mutual’s use of technology and the increasing implementation of AI facilitate improved customer engagement, attracting a diverse array of members who resonate with the mutual’s operating ethos, effectively revitalising the mutuals and co-operatives sector.
This is also creating interest in the formation and launch of new mutuals where no specific sector mutual currently exists. Each mutual is thoughtfully crafted to cater to the unique requirements of its membership base, creating bespoke entities that address specific needs and aspirations.
If the management or creation of a mutual is of interest to you, we would welcome the opportunity to discuss and explore this with you.
David Gudopp
As our Risk Mitigation and Transfer Specialist in our Insurance, Mutuals and Co-operatives ans Risk Management division, David will bring over 20 years of experience to the table. David’s focus is on providing clients with an independent assessment of their risk transfer arrangements and driving targeted outcomes.
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