Peak Reinsurance Company Limited (“Peak Re”), a global reinsurer based in Hong Kong, publishes a new comprehensive analysis on Mutuals and Cooperatives and Community based Organisations (MCCOs).
Titled “Relevance of Mutual and Cooperative – Lessons learned from developed Europe and Asia”, the Peak Re report highlights the importance of MCCOs to the insurance industry and how they continue to play a key role in supplementing the social welfare system.
MCCOs account for over 30% of the insurance markets in Europe and North America while Japanese MCCOs generate 80% of the mutual premium in the Asia and Oceania region. Their market share is set to continue to grow because of their relevance to communities and benefits to the social groups that they serve.
Arina Tek, Vice President, Market Research and Analysis, at Peak Re and author of the report, says, “MCCOs have supported economic development and social stability. Their rise in popularity was built around relevance and simplicity of purpose to members, long before the existence of a social welfare system. Today, while social welfare is common in developed countries, MCCOs still have a role to play as supplement to the social welfare system and to commercial insurers.”
For MCCOs to be sustainable, good and effective governance is key, according to the report.
“Good and effective governance is essential to preserve the identity of MCCO. It ultimately relates to the organisation’s ability to stay relevant, trusted and be sustainable. Governance for MCCOs must be structured in a way to hear members and employees’ voices as it shows how much the management cares about their future,” as stated in the report.
“Good and effective governance is a also another means to attract third party capital because it supports the argument that MCCOs are sustainable.”
Peak Re has produced this report in recognition of the mutual concept as part of its mission to narrow the protection gap.
This report also contains best practices of successful MCCOs and how they stay relevant to society while addressing regulatory requirements and potentially external investors.
Franz Josef Hahn, Chief Executive Officer of Peak Re, comments on the report, “The subject of MCCOs is not usually discussed despite its long operating history and its growing market share. I am proud that Peak Re is demonstrating its commitment to this important sector with this report by providing useful insights on MCCOs. This research topic was initiated as we recognised the benefits of MCCOs and our shared objectives to support community to fight against poverty. This is well aligned with Peak Re’s strategy to support the needs of communities through meeting reinsurance needs in Asia and around the globe.”