Federation’s history

1. Federation’s history • 1922 ICIF Founded as insurance division of ICA • 1949 Reinsurance started • 1963 Development started • 1972 Independent secretariat from ICA • 1993 Restructured and integrated • 2005 New services strategy • 2007 New mission, vision, values and goals

2. Mission & Vision Mission statement “To promote and work with the cooperative and mutual insurance sector globally.” Vision statement “A world leader in providing information and services to members, and representing the interests of, the global cooperative and mutual insurance sector.”

3. What is ICMIF • 195 members in 72 countries • Members represent over 600 insurance organisations • Indirectly represent a further 1,500 insurance organisations through national trade association members • Represents 6% of worlds insurance market • USD 1 trillion in assets • Over 300,000 staff employed by members • Four regional associations including AAC/MIS in the Americas • www.icmif.org and www.aacmis.org

4. Global Mutual & Coop market shareis 25%

5. Global mutual insurance market Source: ICMIF 2004 1 = excludes Standard Life demutualised 2006

6. Making Global economies more efficient? Source: International Cooperative Alliance Oct 2006

7. ICMIF member key challenges ICMIF conference Sept 2007

8. Creating the modern mutual • How can we approach these key challenges? • Influence our business environment • By recognising our key stakeholders and influencing them • Apply innovative business strategies • Reflect our unique selling point, our mutuality • Put mutuality at the centre of the business strategy • Measurability and accountability

9. Stakeholders Government Regulators Members The mutual General public Media

10. Interest The Mutual Regulator Members Government Govemt Media General public Influencers Power Typical Mutual Business Environment

11. Interest Regulator The Mutual Government Members Media General public Influencers Power Target Mutual Business Environment

12. Create awareness Government Regulators Members Mutual Awareness The mutual General public Media

13. Engagement&Communication

14. Where do we start? Organisational excellence (mutual) Create customer loyalty (members) Understand the mutual customer (public) Create media stories (media) Influence the legal and regulatory environment

15. Get our own house in order!! Mutual must be at least as efficient as their stock company counterparts

16. Organisational excellence • Financial performance • Financial security • Quality products • High service standards • Investing in people • Customer focused • Community focused • Mutual values

17. Create the value proposition

18. Trust Customersatisfaction Retention The Mutuality Circle Greater customer service Higher returns Lower acquisition costs Value for money

19. Measuring Mutuality • Must be as financially efficient as stock companies • What gets measured gets done (improves) • Financial measurements • Expense ratios • Claims ratios • Combined ratios • Investment returns • Cost of demutualization • Retention rates • Cost of capital • CSR measurements or reporting • Trust measurements • Customer satisfaction • Community involvement • Member engagement • Product comparisons • Number of products per member • Service level agreements • Complaints monitoring

20. Profit distribution • Reserves adding to solvency • Stock company - dividends • Mutuals • Reduction in next year’s premiums • Mutual bonus • Product enhancements • Lifestyle promotions • Corporate giving • Member involvement • Community involvement • Affinity based involvement • Socially responsible projects • Inclusivity

21. Members Communicating with members Communicate the values and mutuality Engagement with members Creates Loyalty and advocacy Creates trust

22. Governance • Democratic • Transparency • Ownership • Engagement • Member forums • Shared decision making on CSR issues

23. Customer Satisfaction survey • Survey of over 18,000 customers with a third from mutuals • The results for the mutual insurers were above the industry average in every measurement; • Mutuals outperformed the industry by greater than 5% in 14 out of 29 measurements (highlighted in orange) • Mutuals outperformed the plcs by greater than 5% in 51 out of 58 measurements (91%) (highlighted in blue) and in 9 cases by more than 10%

24. Customer Impact Scorecard – Mutual Insurers 1st number: 2007 Mutual Insurers score 2nd number: 2007 industry score (29 brands) Positive difference of 5 pc points or more on 2007 Industry No difference on 2007 Industry (or difference less than 5 pc points) TTB = Top two box, i.e. ‘excellent/very good’. Excludes DK * = all calling service centre in last 6 months (n=1,340 or 22% of total)

25. Understanding the mutual customer • What does the typical mutual look like? • Young/old • Wealthy/poor • Professional/blue collar • Male/female • Community/individual • Value driven/profit motivated

26. General Public - issues • Lack of awareness of mutuals • Customers prefer known brands • Lack of interest in financial services • General public rely on media • Mutuals perceived as small • Mutuals perceived as inefficient and old fashioned • Perceived size is strongly linked to brand

27. Is brand important?

28. Source ICMIF conference 2007

29. Measure the awareness of mutuality in the market

30. In a business context, have you heard of the term, a ‘mutual’ organisation? % of respondents, Base = 1013 Source AMI July 2006

31. If you were asked to describe the differences between a mutual organisation and a public limited company, which of the following best describes your feelings? % of respondents, Base = 1013 Source AMI July 2006

32. Conclusions • Some awareness • Little understanding of what a mutual is • Virtually no understanding of the potential benefits

33. Opportunities for Mutuals • Focus group research by AMI April 2007 • Aim was to understand who the mutual customer is • Find out what the general public think of mutuality • Identify business opportunities for mutuals

34. Dynamism and Values? • The perceived “values” of Mutuals is seen as a benefit • In the absence of evidence, there is no automatic assumption that Mutuals are dynamic or strong performers • especially compared with PLCs for whom performance and drive is a key communication and assumed benefit • Consumers want the best of both and believe they can coexist Values Dynamism + • VS

35. “I think now you explained what it does and means … you see what it is and the public don’t realise that mutuals will probably benefit you more” “This has changed my opinion in terms of looking for life insurance” “If the two parties performed as well as each other, and it was explained about the mutual side, then I would pick the mutual… so long as the money does as well with them as it would with someone else” “I think the trust element is implicit with the mutuals”

36. Create Awareness • Respondents noted the need to create awareness of mutual brands • And their mutual status “The only thing I can think of is… that they need to raise the profile… to let people know what they are!” “I think if I was head of a mutual, I would look around at other mutuals and say, look why don’t we get together and split the costs and raise the profiles of mutuals?”

37. Source ICMIF conference 2007

38. Educate on what Mutuality Stands For • Respondents spontaneously mentioned a strong need to educate the public on the features of mutuality Customer (not shareholder) focus • And more importantly, any demonstrable hard benefits e.g. Superior performance Cost Competitive Value for money

39. As well as emphasising “softer” benefits • Softer benefits associated with mutuality (once understanding of the concept is established) and which should be conveyed: Customer service The best of traditional values (ideally combined with an up-to-date image) “It is nice to think that maybe if the word [mutual] is there then… you can trust them”

40. Other Potential Messages • Distinct from PLCs Hard working, dynamic mutuals Vs “Fat Cat” PLCs Staff who know their customers Vs Remote, impersonal call centres

41. Research Conclusions • Mutuality has the potential to appeal to the entire market based on: • Improved profile (individual brands or collectively) • Demonstrable performance benefits • Traditional values combined with dynamism • Favourable comparison with PLCs • Particular resonance with the Generation Y (younger)

42. How do we create a dynamic, values-driven organisation?

43. Create the Story • The media today are time constrained • Rely on stories fed to them • Prefer human interest stories • CSR stories are in vogue • Look beyond the financial sections • Lifestyle media • Create a constant flow of good news stories • Fast and efficient way to create a good public reputation

44. The Business Environment It’s all about influence

45. Regulation issues • Increased regulation hence increased costs • Increasing solvency levels • Greater focus on risk in regulation • One size fits all regulation • Preference to regulate fewer larger companies • Unspoken move towards consolidation • Little understanding of mutual sector • Stock company dominance • Greater focus on international best practices (IAIS)

46. ICMIF conference Sept 2007

47. Regulation strategies • Create awareness of the sector • Increased communication • Work in partnership with regulator • Influence regulation from pre-draft stage • Be ahead of the game • UK Corporate Governance code – self regulation • Mutual regulation guidelines • Proportionality in regulation • Training the regulator • Modern mutuality seminars • Utilise ICMIF, AAC/MIS and international examples

48. Government issues • No awareness of mutual sector • Politicians have short-term perspectives • Little insurance speciality • Set the legal environment • Stock companies tend to be dominant lobbyists

49. Government strategies • Create awareness • Public affairs strategy as a sector • Constant networking not just when issues arise • Provide training for government • Work on policies that lead to products • Change or create favourable legal environment for mutuals

50. “There’s not a single sphere where there’s not a co-operative presence and voice. Co-operative principles are in line with today’s progressive values. The whole purpose is of people being stronger. We can achieve much more together.” Tony Blair Ex-Prime Minister, UK February 2007