What Is a Member-Led Mutual and Why Are More Councils Choosing Them?

Across Australia, local councils face a growing set of challenges, including increased liability, evolving regulatory requirements, natural disasters, cyber threats and rising insurance premiums, to name a few. 

Increasingly, councils are turning to member-led mutuals to achieve greater flexibility and targeted risk mitigation support. A member-led mutual is a not-for-profit insurance alternative owned and operated by its member policyholders. Instead of buying traditional insurance policies from a commercial provider, member councils pool their resources to manage risk collectively. 

This guide explores what a member-led mutual is and how it helps councils strategically manage risk to achieve stronger risk resilience collectively 

What Makes a Member-Led Mutual Different?

Unlike commercial insurers, a mutual operates on the principle of mutuality. Member councils make annual financial contributions and collectively manage the mutual’s direction. That includes setting policies, guiding funding decisions and directly benefiting from surplus funds. 

Below are key characteristics of a local government mutual:

Member-Owned and Member-Operated

Each mutual member (or policyholder) participates in governance and important decisions, such as determining the annual contributions. Transparency and collaboration between members are foundational to achieving better outcomes for everyone. 

Not-for-Profit

Mutuals reinvest profits to enhance services and support. By reinstating gains into the mutual, all councils benefit from enhanced claims support, customised training and education and targeted funding programs to mitigate risk.

Tailored Support

A mutual offers benefits that respond to the realities of local government, like stable premiums, cost containment, regular asset valuations and emerging risk advice.

How Does a Local Government Mutual Work?

Local council mutuals like CivicRisk Mutual operate on a funding model where councils pay an annual contribution. Members decide the contribution formula policy, which is based on the size and claims history of each council. 

These funds go towards several core areas:

• Self-insured retention.
• Group policy insurance premiums.
• Risk management support.
• Claims and broker services.
• Administrative and professional development costs.
• Training, education and risk enhancement.

Risk gets shared across the group. If one council needs to make a large claim, the mutual pool absorbs it, mitigating financial shocks. This model incentivises shared risk prevention across all member councils.

There’s also less focus placed on purely contractual policy wording. Discretionary claims handling allows the board to make fair and reasonable claim-related decisions. A flexible approach often results in better outcomes for members.

How a Mutual Benefits Council

Because the mutual is designed for local government, its services reflect everyday reality on the ground. Councils get access to services that genuinely add value, such as:

• Regular asset valuations.
• Tailored risk assessments.
• On-the-ground training sessions.
• Risk enhancement grants.
• Forums for knowledge sharing.

These services shift the focus from short-term gains to a long-term collective risk prevention focus. CivicRisk Mutual helps members identify long-term risks and monitor them regularly to make adjustments as needed. Open discussion and continuous improvement are core to this model.

Why More Councils Are Moving to Mutuals

A mutual’s emphasis on prevention, education and accountability lifts the overall standards for everyone. Members pool risks, support one another and strive to improve collective outcomes.

Here are a few more benefits of council mutuals:

Stability and Security

Traditional insurance premiums can fluctuate wildly, especially in a volatile market. Because CivicRisk’s model is member-funded, cost fluctuations are predictable and transparent.

Cost Containment

By working collaboratively to reduce incidents, members reduce claims. Ultimately, this helps lower long-term contributions.

Community Focus

Decisions are made locally by peers who understand the responsibilities of local government. Members can access more relevant training, effective claims handling and services that reflect member needs.

Make Your Council’s Risk Protection Work for You

Mutuals help councils take ownership of their risk and actively protect communities. They encourage members to achieve greater risk resilience through targeted service delivery.

CivicRisk Mutual is a network of like-minded councils across New South Wales and Victoria, committed to proactive risk management, collaboration and knowledge sharing. If your council is seeking a practical and collaborative pathway to reduce exposures and mitigate risk, CivicRisk Mutual offers tools, peer connection and expert advice.

To find out more about how we can support your council, get in touch with our team.