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Mutual societies

Mutuals are enterprises providing life and non-life insurance services, complementary social security schemes, and small value services of social nature. Their primary purpose is to satisfy common needs while not making profits or providing a return on capital. Mutual societies are managed according to solidarity principles between members who participate in its corporate governance. They are intended to be accountable to those whose needs they were created to serve.

How mutual societies work

Mutual societies account for 25% of the European insurance market. They exist mainly in Nordic and western European countries, and offer insurance services that are usually provided by public limited companies with share capital and cooperatives in other countries. Almost 70% of insurance companies in Europe are mutual societies. A number of mutuals develop cross-border activities. However, the legal business form of a mutual is not recognised in all EU countries.

In Europe there exist two types of mutuals:

  • Health (providence) mutual - these predate modern social security systems and cover risks such as illness, handicap, infirmity and death. These are usually subject to specific legislation.
  • Insurance mutual - these cover all types of risk (accident, life insurance, etc.) and are normally subject to general legislation regarding insurance.

National legislations are fairly homogeneous in respect of insurance mutuals, but highly diverse in respect of providence mutuals. The latter have evolved according to the social security systems in each EU country.

Supporting documents