Why Emerging DMFs Seek Guidance From CivicRisk Mutual

There are many aspects of CivicRisk Mutual’s undercurrents that members may be unfamiliar with. Among those is its glowing global and local reputation as an industry leader in the discretionary mutual fund (DMF) sector.

We spoke with CivicRisk Mutual’s CEO, Andrew Armitstead, to learn why so many organisations are reaching out to the Mutual for advice, and how CivicRisk Mutual climbed its way up to such a position of influence.

CivicRisk Mutual: An Achiever on the Global Stage

National and international bodies, including the Business Council of Cooperatives and Mutuals (BCCM), the Association of Governmental Risk Pools (AGRiP) and the International Cooperative and Mutual Insurance Federation (ICMIF), regularly approach CivicRisk Mutual.

These organisations come from multiple sectors, including the coal industry, foreign governments, religious institutions and show societies. Their goal is to seek CivicRisk Mutual’s help in solving complex challenges, to collaborate with the Mutual and to learn about DMF best practices.

“It’s encouraging and quite humbling,”  Andrew explains, “that we’re regarded by those national and international bodies as probably the best run mutual, certainly in Australia.”

This external validation is a strong signal that our members belong to a stable, premier organisation.

Taking Control of Our Own Destiny

In the formative days of the late 80s, founding member councils desperately needed protection and were limited to just one or two insurers. Today, the Mutual has flipped the power dynamic. According to Andrew, it now deals with roughly 50 insurers. “The program is in demand. Now, we have to turn insurers away. That’s a great position to be in,” he adds.

Not only is the Mutual regarded by insurers as the best manager of local government claims in Australia, but across the pond, CivicRisk has also earned a reputation in the London Market as a “big player.”

Many organisations approach CivicRisk, interested in learning how to replicate this journey from humble beginnings to industry leadership.

What CivicRisk Mutual Can Teach Others

Understanding how to become successful is often clear only in hindsight. “We were just doing what we were doing, and we didn’t realise how well we were doing it,” Andrew casually mentions. “[But] what we are now achieving, other organisations wish they could do.”

So, here’s the question everyone wants to know: What’s the CivicRisk Mutual blueprint for success?

According to the CEO, it boils down to four key competencies:

1. Member Control

Being owned and operated by members is central to the Mutual’s success and appeal. A key piece of advice Andrew gives startups is that the mutual must be owned and run by the members, not by brokers or third-party insurers who may prioritise profit over member needs.

2. Capital Strength

CivicRisk Mutual demonstrates the importance and benefits of strong capitalisation, benchmarking itself against APRA standards (which regulates insurance companies) to ensure financial stability.

3. Strategic Innovation

The Mutual has repeatedly proven itself in the market by finding creative risk solutions, such as:

• Establishing a captive insurance company, which has saved the group $14 million in four years.
• Self-insurance, with two major programs being flood and motor vehicles. The motor vehicle scheme alone comprises 9,000 vehicles and is one of the largest self-insured schemes in Australia, rarely exceeding its claim funds.

4. Mutual Value Measurement

CivicRisk was the first accredited mutual in Australia to introduce Mutual Value Measurement, which quantifies and tracks benefits delivered to members.

“We have taken control of our own destiny instead of being controlled by the insurance market,” says Andrew. “That’s something members should be proud of.”

The Financial Proof Is in the Pudding

The advice CivicRisk Mutual offers to industry peers is backed by numbers. In the last three years alone, members saved $50 million through investment returns, claims management and surpluses returned to members.

There was one year when savings were so high they equalled contributions, effectively giving members coverage for free. This performance impressed mutuals as far away as the United States.

According to Andrew, long-term members typically receive about 33% of their contributions back. This demonstrates that the model is better suited to local government priorities than traditional insurance, where profit leaves the sector. And in a Mutual, protecting the sector is a critical operation.

Protecting the Sector: Advocacy and Leadership

CivicRisk Mutual leadership actively shapes the industry to shield its members. Andrew and the team regularly lobby the Federal Government to ensure DMFs are understood and not burdened with the same regulations as commercial insurers.

The CivicRisk team also contributed to the Best Practice Guide for DMFs, helping less experienced startups avoid blotting the sector’s reputation. If a startup fails, regulators may tighten the regulatory ropes on the sector.

By supporting these incumbents as they climb the ladder to success and ensuring they’re set up for sustainability rather than a “quick fix for expensive insurance,” the Mutual protects the regulatory environment for its own members and the sector at large.

Stepping Into a Self-Determined Future

Gaining industry-leading status and global recognition didn’t come by accident. It was built by the collaborative decisions of management and members over the decades.

The depth of the management team, which grew from one man to an 11-strong powerhouse with in-house claims expertise, ensures CivicRisk Mutual remains the benchmark for the future. Looking forward, the Mutual has strategic, measured growth in the pipeline as it continues to develop its contribution to members and the sector alike.

The Mutual’s position and combined strength should inspire confidence among new members and make long-standing members proud. After all, they are the ones who have helped the Mutual achieve these feats and who will help shape the future of the industry.