Mutual Insurance Structures have been around for over 100 years and can be found globally in all major economies. Selected professional occupations in Australia are now eligible to hold their insurances through a Mutual Structure.
What is a Mutual and why should you consider a Mutual for your personal insurance?
A Mutual can offer the same insurance products to those that are offered by non Mutuals. Specifically, Life, Total & Permanent Disability (TPD), Trauma, Income Protection and Business Expense Insurances.
You may be surprised to know that almost all the Life insurance companies in Australia were once Mutuals, which then “demutualised”. This means the policy holders no longer share in the profits of the company unless they purchase ‘actual’ shares in the insurance company. In the case of a Mutual, policyholders are eligible to share in the annual profit generated by the product, based on the premiums that they pay.
You may also be surprised to know that Mutual insurance companies around the world account for 27% of the total insurance market (ICMIF).
Many Mutuals operate in niche markets understanding that their intent is not to be all things to all people.
In Australia, we now have PPS Mutual. PPS Mutual Insurance is licensed by ASIC and has partnered with an APRA regulated insurer, and one of the world’s largest re-insurers, to provide quality personal Life, TPD, Trauma, Income Protection and Business Expenses insurance products to selected professional occupations. By only offering cover to a select group of clients, PPS Mutual has been able to design high quality benefits at competitive rates for professionals . This means that over time, as a policy holder, you are eligible to share in the profits of the product which are allocated to your individual profit share account.
In summary, the 3 main areas a Mutual insurance structure is different from a typical insurer in Australia are:
- PPS Mutual limit the group of professionals who may take out insurance policies to 13 selected occupations. By doing so they are identifying clients who are generally lower risk.
- PPS Mutual don’t offer a range of variations on their product and have rather concentrated on best of breed, Life, Trauma, TPD & Income Protection, as don’t need to consider accommodating higher risk occupations. This has allowed them to design definitions and benefits best suited to the professionals they cover
- As a mutual structure, over time, policyholders share in the profits of the product.
PPS membership is open to professionals in one of the following eligible professions, by meeting the Eligibility Criteria for that profession.
- Dentist, Dental Specialist
- Doctor, GP or Specialist
Commercial & Legal Professionals
- Barrister, Solicitor, Judge
- Quantity Surveyor
How can Fairbridge Help?
Fairbridge is a licensed Australian financial services company, specialising in life insurance advice and accredited by PPS Mutual Australia to advise you on the PPS insurance products.
Please note this article is for information purposes only and does not form the contract of insurance. The complete terms of coverage for any insurer are detailed in the Product Disclosure Statement and Policy Document. The information in this document is up to date at the time of its preparation, however, may be subject to change from time to time. Furthermore, this document is not to be construed as providing advice. It has been prepared without taking into account any person’s financial circumstances or needs. Before making any decision you should obtain personalised professional advice.