Consumer-owned Insurance Providers

Life is a risky business. Anything that can go wrong will go wrong somewhere, sometime, to somebody. Life is riskier for people on low incomes because they have so little to lose before they fall into poverty. However, people on middle incomes also face risks particularly from illness, and one has to be very rich to avoid the costs of long-term ill health, losing one’s home to a fire, or just growing older. This is why most people in developed economies support some kind of welfare state to insure them collectively against the most common risks of unemployment, ill health, disability, dependency in childhood and old age. Even then, there are risks that are not covered; welfare states vary considerably in the extent to which they provide social insurance and affordable health care, and in every country in the developed world there is a large private insurance sector providing assurance against accidents, fires and floods, as well as health and life insurance. Also, governments need help in delivering benefits and services and often choose to do so in partnership with member-owned insurance providers. In this chapter we explore the historical development of three distinct types of insurance mutual: friendly societies, mutual insurance companies and insurers set up as secondary co-operatives.