Communicating the Economic Value of Customer Ownership in Insurance: A Qualitative Analysis of Annual Reports

Abstract

Its distinctive ownership base leads to a customer‐owned mutual insurer representing a mission and purpose of existence that are very different from those of an investor‐owned insurer. While the owner value of the latter can be defined in terms of return on invested capital, in mutuals, the attention is shifted toward benefits and value for customers. Despite this major difference, scholars know little about mutual insurers' value‐creating processes. To begin filling this knowledge gap, the article explores and identifies how managers of mutual insurance companies understand and communicate the economic value of ownership to their customer–owners and other stakeholders. It reports on thematic analysis of annual reports of 18 mutuals, based in seven countries (England, Finland, Ireland, The Netherlands, Sweden, Switzerland, and the United States), on the basis of which the authors offer a tentative framework for enhancing scholars' and practitioners' understanding of how the economic value of ownership is understood in a customer‐owned mutual insurance company.