Mutual insurers must differentiate themselves to remain competitive in the face of increasing pricing pressure, according to David Thomas, CEO of market services and solutions at Willis.
As mutuals work with a long-term view of their customers, the stability of the product is key. As a result there are periods when mutuals’ pricing is considerably cheaper than the commercial market, and other periods when they are more expensive.
David Thomas, CEO of market services and solutions at Willis, commented:
“At a time like this mutuals are faced with enormous pricing pressure.”
“In this environment they must emphasise how they differ from the competition in terms of understanding the dynamics of a homogeneous book of business, and how their risk management and claims services are bespoke to the needs of their clients. If they do these things well, I think that they can weather the current environment.”
John Haydon, executive vice president at Willis Re, said: “Mutuals usually have a particular geographic territory or membership base that means that they are narrow in focus when compared with a typical commercial lines carrier."
“As a result, they tend to suffer when being considered from a Solvency II or rating agency standpoint. This means they must use all of the tools at their disposal, such as analytics, to minimise that disadvantage.”
