Many observers say that the advantages of the co-operative structure in servicing the poor diminish as the organisation grows larger. Solidarity, member participation, member driven services, flexibility and concern for the community are not evident once the organisation expands beyond the local village. Additionally, the co-operative structure is seen as prohibiting the growth of the organisation due to its lack of access to technical and financial resources. However, the membership of the International Co-operative and Mutual Insurance Federation (ICMIF) show that co-operative insurance companies are successful and competitive in developing and developed countries. The ICMIF has 122 member companies operating in 65 countries, serving sectors from farming, fishing, trade unions, teachers, civil servants, doctors, credit unions and co-operatives. The size of the members range from some of the world’s largest international insurance organisations to small start up operations serving a small niche in local markets (ICMIF 2001a). Whilst maintaining certain co-operative principles becomes more difficult as the organisation grows it is definitely not impossible as demonstrated by ICMIF members (Appendix Five).
Despite the conventional premise that starting up insurance operations require a huge financial commitment and access to capital, many have started without share-capitals and have developed with a low net worth (Ripoll 1996). The German, Japanese and Korean insurance systems originated in small schemes of employed people (Creese & Bennett 1997). In 1997 six of the ten largest insurance companies in the world and almost half of the top fifty were mutuals, overall global market share by mutuals was around 40% (Birkmaier 1999). The growth of these large co-operatives and mutuals and their adherence to their co-operative principles mean they can give the socially excluded a greater voice in government policies and practices. As well as achieving size many large co-operatives have been able to use their structure to give them a competitive advantage. In its study of 97 companies in 11 countries in Europe, ACME[33] found that mutuals were showing to be more successful in market performance than their plc competitors during the late 1990s. They paid higher claims ratios (i.e. paid more back to the members) and maintained lower costs ratios, demonstrating their continued drive for efficiency of operations and value for members (ACME 2000).
Co-operatives have succeeded in providing insurance products and maintaining its social objectives by adhering to the following principles:
1. Good corporate governance.
2. Proper form of accounting and transparency
3. Practising an open, voluntary and non-discriminating membership.
4. A high degree of autonomy and self-reliance.
5. Clear focus or objective to hold members together, such as access to affordable insurance products.
6. Ensure that everybody has access to and can afford to join the co-operative.
(Blomqvist & Böök 2000, Ledbeater & Christie 2000, Ullrich 1997).
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