Cooperative insurance allows different entities have one shared insurance policy. It is convenient, for example, when several companies operate in one office building. They share the same risks (burglary, fire, etc.). They also use the same areas (hallways, basement).
Purchase of one cooperative insurance is usually cheaper than buying several individual policies. It is also possible to transfer policy easier when one company leaves and new comes into the office building.
Cooperative insurance is also popular in some companies or trade unions which offer their employees or participants cooperative health insurance. Such insurance may cover health problems related to work, however, in some companies there are much more extensive policies available.
Cooperative Insurance Companies
Cooperative insurance companies are corporations organized like mutual companies for the benefit of their policyholders. The differences are related to the adherence to co-operative principles. The company can be formed as a stock company, form allowed by the laws of the country concerned. As a stock company, control of the cooperative insurance company is directly vested in other branches of the co-operative movement.
Cooperative insurance companies are linked to democratic, progressive movements' including cooperatives operating in other fields and labour unions. At first, the cooperative movement was particularly strong in Scandinavian countries but was also well established in Caiida, Austria, Switzerland and Japan. In recent years it has made rapid progress in some developing countries as well. The International Co-operative and Mutual Insurance Federation (ICMIF) is a voluntary association of insurance organizations whose constitutions are based on co-operative principles.
The Co-operative Insurance Company Limited was created in 1867 to provide fire and fidelity guarantee insurance to co-operative societies. In 1899, industrial life business was introduced and the company was converted into an industrial and provident society. Company changing name to (CIS) Co-operative Insurance Society Limited. Other classes of business were provided for the general public and not just for cooperative societies and their members. In 2002, Co-operative Financial Services was created as a holding company for both Co-operative Insurance Company and The Co-operative Bank.The Co-operative Insurance and The Co-operative Investments trading names were introduced in 2008.
In 2006, CIS divide its life and general insurance businesses into two separate entities General Insurance Limited within which all new and renewing insurance business was written. CFS Management Services Limited was created to provide common support services to both CIS and CISGIL. In 2011, after 125 years, The Co-operative Insurance announced that it would cease providing life assurance products. In 2013, the Co-operative Banking Group agreed to sell the life insurance, investment and pension businesses to the Royal London Mutual Insurance Society in order to increase its chances of buying more Lloyds TSB branches due to be divested from Lloyds Banking Group. The intention to sell the general insurance aspect was also announced.
In May 2013, the Co-operative Banking Group withdrew from the agreed purchase of the TSB business referring to the economic outlook in the UK. The Group revealed a shortfall in its accounts of up. In July 2013, Co-operative Insurance Society became a private company limited by shares, changing its name to Royal London Limited.
Following the recapitalisation of the Co-operative Bank, The Co-operative Bank is now a separate legal entity to The Co-operative Group. Cooperative Insurance now forms part of The Co-operative Group's family of businesses.
- Li Y., Wu Q., Liu C., Kang Z., Xie X., Yin H.,... & Ning, N. (2014). Catastrophic health expenditure and rural household impoverishment in China: what role does the new cooperative health insurance scheme play?. Plos one, 9(4)
- Outreville J. F. (1998) Theory and Practice of Insurance, Springer Science+Business Media, LLC
- Trenerry C.F., Gover E.L., Paul A.S. (2009) The Origin and Early History of Insurance Including The Contract of Bottomry, The Lawbook Exchange, Ltd
- F.J. Outreville (1998)
- C.F. Trenerry, E.L. Gover, A.S. Paul (2009)
Author: Karolina Piotrowska