Mutuals 'must differentiate' to remain competitive

David Thomas, CEO of market services & solutions at Willis explained as mutuals tend to take a long-term view of their customers with a stable product over a long period of time, it leads to pricing anomalies.

As a result there are periods when mutuals' pricing is considerably cheaper than the commercial market, and other periods when they are more expensive, Thomas said.

Thomas added: "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."

He concluded: "If they do these things well, I think that they can weather the current environment."

Meanwhile, John Haydon, executive vice president at Willis Re added that analytics are "absolutely critical" to mutuals.

He 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."

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• Topics
• Insurer
• adviser firms
• mutuals