Broadstone, a leading independent financial services consultancy, has launched a new Report – The Mutual Impact – highlighting the “significant growth opportunity” for the mutual life insurance sector given their ability to support customers in an uncertain economic backdrop.
The Report follows vocal support for mutuals in the Chancellor’s Mansion House speech where Rachel Reeves committed to supporting the sector via the launch of an industry-led Mutuals Council to drive growth, and she requested the Regulators to report on the mutuals landscape in 2025.
This builds on the Government’s manifesto commitment to double the size of the co-operative and mutual sector. The FCA has also welcomed the Government’s focus on financial inclusion as a driver of economic growth with around 14 million adults in the UK holding less than £100 in savings.
The mutual life insurance sector is well-placed to help protect consumers and improve access to financial products by servicing often under-served demographics. Broadstone’s Report highlighted three areas where mutual life insurers could focus to deliver on this opportunity:
· Evolving customer needs: cost of living and health service pressures are increasing demand for insurance products which is exacerbated by the advice and protection gap creating an under-served market.
· Societal needs: developing sustainable and socially oriented insurance products can help address savings and protection gaps and improve health and wellbeing for a population that is more socially aware.
· AI and transformation: mutuals have the opportunity to improve efficiency and manage the cost base by harnessing generative AI.
Ewen Tweedie, Actuarial Director at Broadstone’s Insurance, Regulatory & Risk division, said: “The mutual life insurance sector is well positioned to seize a significant growth opportunity thanks to their unique member-led solution to financial services delivering strong societal benefits.
“The Government has committed to doubling the size of the mutual sector which will be achieved by driving efficiencies through new technologies while leveraging a connection to local communities which can unlock benefits for new customer bases.
“With no shareholders to satisfy, mutuals can take ethical and pragmatic long-term decisions that focus on the right outcomes for their members. Coupled with historic, trusted brands and financial strength, mutuals can help meet the demand for insurance products and bespoke financial services for an expanding and under-served market.”
