Leaders Optimistic About the Future as Mutuals Fare Well Through 2019, 2020 Pandemic
INDIANAPOLIS (Sept. 23, 2020) – The mutual insurance industry remains financially strong despite the tumultuous first half of 2020 and well positioned for the future, according to the third annual market performance analysis released today by the National Association of Mutual Insurance Companies and Aon, a leading global professional services firm providing a broad range of risk, retirement, and health solutions.
The latest report, “Mutual Factor 2020: How Performance, Structure, and Focus Set Mutual Insurance Companies Apart, evaluated nearly 30 performance metrics for mutual insurance companies in 2019 compared to other insurer categories and assessed the impact of ratings agency criteria on mutuals. In recognition of the unparalleled circumstances facing the insurance industry as the result of the COVID-19 pandemic, the new Mutual Factor report also analyzed performance metrics for the first two quarters of 2020 and looked at how thought leaders perceive the mutual industry.
Neil Alldredge, NAMIC’s senior vice president of corporate affairs, noted the inclusion of current-year data is a departure from past reports, but one that was critical to understanding the value of the underlying mutual structure and focus of the mutual insurance segment.
“While the 2019 data is important to keep the comparison to previous years, we knew the picture would not be complete without factoring in the impact of the coronavirus on the industry,” Alldredge said. “What we found is that despite the many challenges – from a new remote working environment, to regulatory and legislative efforts and a changing marketplace – the mutual industry has held up well. The same focus on financial strength, alignment with policyholders, and support for their communities that have guided mutuals for decades or even centuries has continued to help them through these latest crises.”
The study includes a comprehensive analysis of the performance of more than 600 insurers under AM Best’s Credit Rating Methodology framework.
“Aon is very pleased to once again work with NAMIC on the development of this important report. The mutual insurance industry entered this year of uncertainty in a position of solidity and strength, which has allowed mutual carriers to provide the unique sort of support their policyholders have come to appreciate,” said Chris Delhey, senior managing director and leader of Aon’s Mutual Practice Group. “Maybe even more impressive is the emergence of the mutual marketplace from these challenges in an even stronger position.”
Among the key findings from the 2020 Mutual Factor report:
The Mutual Factor report also surveyed 22 industry executives across the country from mutual insurance companies reflecting different sizes and lines of business to gain perspective on what challenges the industry currently faces and will face in the future. Specific highlights include:
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NAMIC membership includes more than 1,400 member companies. The association supports regional and local mutual insurance companies on main streets across America and many of the country’s largest national insurers. NAMIC member companies write $278 billion in annual premiums. Its members account for 58 percent of homeowners, 44 percent of automobile, and 30 percent of the business insurance markets.
Aon plc (NYSE: AON) is a leading global professional services firm providing a broad range of risk, retirement, and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
Article Posted: 09.23.20
Last Updated: 09.24.20