Successful co-operative insurance companies

Appendix Five


Case study 4: MACIF – France

MACIF is the largest French automobile insurer for retail and commercial sectors, formed in 1960 it now serves over 5 million policyholders. In order to ensure greater and real policyholder influence the company in the mid-1980’s established 11 autonomous regions with its own board and management. The delegates of the regional board and committees represent the opinions and concerns of 2,500 members each. These delegates are trained in premium calculation, products, finance and involved in decision making process on rate increases. The national general assembly elects the national board and management, and is made up of regional delegates. The policyholder is informed of his or her rights and responsibilities as a member of MACIF and is gradually encouraged to become active in the operations of MACIF, by firstly voting for a regional delegate and then to become involved in policy setting (ACME 2001).

MACIF also funds projects dealing with job creation and re-training the long-term unemployed. One example is cars belonging to MACIF policyholders that are total write-offs, are dismantled for useable parts which are repaired and sold on. This project provides employment and a two-year training course leading to qualifications (ACME 2001).

Case study 5: FNMF - France

Mutualité Française, the Federation for French Health Mutuals, comprises of 3,000 companies providing supplementary health insurance and health care services to over 30 million people. The costs of healthcare in France is less and less adequately reimbursed by the mandatory system of national health insurance, the additional reimbursements from mutuals enables access to proper treatment. FNMF has made healthcare available to everyone, regardless of income, it has 1500 facilities established across France, with some located in disadvantaged areas. The Mutual pharmacies are developing their own range of unbranded products at lower costs to enable greater access for the poor.

FNMF also provides programs to promote public health and wellness in schools, neighbourhoods and local missions and publishes a journal “Health and Work” to inform on health issues and working conditions. Continuous research is carried out to improve the quality of healthcare and explore areas insufficiently treated such as palliative care and drug addiction. In the last four years a special action programme has been implemented with the support of the government, designed to provide health care for poor people (ACME 2001, FNMF 2001).

Case study 6: Folksam-Sweden

Folksam was established to underwrite general insurance in 1908 by the co-operative movement, trade union movement and the social democratic party. The objective of the company was to provide fire insurance on contents, with particular focus on the insurance needs of the average citizen. The then-existing insurance companies had little interest in the insurance needs of people with small assets. As the company was not able to raise the required capital it was allowed to start underwriting business on the condition that it obtained a certain number of policies in its first year of operations. In 1914 a life insurance company was established to offer cheap life insurance to people of limited means. This made an important contribution to the welfare of the poor, as demonstrated during the time of the Spanish flu in the 1920s, which claimed many lives amongst the poor. In 1925 Folksam introduced the first collective insurance scheme in 1925, providing personal accident cover for trade union members. Compulsory affiliation to the scheme enabled a better spread of risks and lower costs, which made the protection more affordable for those with low incomes. Over the years Folksam has spoken out for social insurance solutions where feasible, such as the creation of a national state-run old-age pension system. Folksam has more than 4 million insured under life and non-life group insurance schemes. Each scheme has an insurance committee where policyholders can put forward ideas, review current policy, assess financial results and discuss product development and claims reviews.

Folksam believes strongly in using its data and insights to prevent or minimise accidents and other insurance events. Its research into traffic safety has gained world-wide recognition, saving countless lives and reducing the suffering of millions. It regularly publishes reports on the interior safety of cars, child restraint systems, and crash pulse recorders in certain cars. The company also exerts considerable influence on environmental protection and costs, particularly in the use of building materials and products.

Recently, Folksam started a pension company with the Swedish Trade Union where all future surpluses of the scheme would in their entirety be for the benefit of the pension plan participants. Additionally, participants are given full insight and influence by having representatives sitting on the board of the company and investment committee. In its constant drive to give value for money, Folksam has reduced the costs of pension savings on the Swedish market by introducing funds that charged only 0.5% as opposed to the common charge on the Swedish fund market of 1.5% per annum. (ACME 2001, Grip 2001, ICMIF 2000, Folksam 1999).

Case study 7: National Farmers Union (NFU) - United Kingdom

NFU Mutual was established by a small group of farmers in 1910 to provide its members easy access to sound affordable insurance protection. The company widened its focus to the British countryside and currently insures two out of three farmers in the UK, writing both life and non-life products through 600 agents and 1,850 staff. Local boards and county insurance committees provide a network of customer councils which look after the interests of policyholders and provide regular feedback to the main board directors who themselves are drawn from local boards. This gives access to top management and board for any member that has a grievance or idea. NFU Mutual uses a network of experienced local farmers who operate as local assessors, particularly when dealing with specialist claims such as livestock and destroyed crop. Farmers have welcomed the involvement of fellow farmers and this one of the reasons why the company has one of the lowest operating costs in the UK market (ACME 2001, ICMIF 2000).