Parliament study on mutuals in Europe

.The European Parliament recently published a study commissioned by the Dutch organization Research voor Beleid on the role of mutuals in the 21st century.


The study first addresses the history of mutuals in Europe, their economic weight, as well as their role and their place in the EU. It differentiates in particular between mutual benefit societies (or health mutuals) and insurance mutuals (covering all types of risks, life and non-life). A section is also dedicated to the role of mutuals in social protection.


In a section addressing the internal European market, the study emphasizes the apparent tendency towards homogenization, and the risk that mutuals may be compelled to act increasingly like joint-stock companies, or to become “demutualized”. It considers that mutuals can be defined, through their activities and their organizational legal status, as economic or non-economic “public-interest social services”. The study emphasizes the importance of creating a statute for European mutuals, noting that various institutions (Commission, Parliament) recently expressed their will to re-table the initiative.


In a chapter dedicated to mutuals in an evolving economic context, the study indicates that mutuals which acquire capital solely through their members rather than through capital markets seem more resilient when faced with financial and credit crises, and are thus more sustainable. They also tend to deal more directly with the insured parties. Yet in a very competitive market, the disadvantage for mutuals is not having easy access to (venture) capital. At the same time, this limited access to capital tends to make them less dependent and insures greater balance between owners, creditors / insured, with a more long-term orientation.


Finally, the last section on the future role for mutuals in Europe identifies a few important challenges for the near future. Especially with demographic change, the need for social protection will become more and more pronounced. The private sector will be expected to assume ever greater responsibilities to insure social security. Mutuals therefore have a key role to play in the future. They could develop their services and assume a more important role in the pension market. The study maintains that a statute for European mutuals could be particularly useful in order to work across borders, but also to foster greater awareness of mutuals in the development of future European policies.

Regulations to limit risk selection or skimming practices and the creation of mechanisms to balance out risks could be implemented as well.


In conclusion, the study affirms that mutuals still have an important place and offer added value for the European economy and for society as a whole.

The role of mutual societies in the 21st century