Experience of mutual insurance companies and the possibilities to use it in Lithuania

Straipsnyje analizuojama draudimo draugijų reikšmė didžiausiose pasaulio draudimo rinkose, išskiriamos ir nagrinėjamos pagrindinės draudimo draugijų reikšmės mažėjimo priežastys. Straipsnyje nurodomi draudimo draugijų ir akcinių draudimo bendrovių veiklos privalumai ir trūkumai, nagrinėjamas draudimo draugijų veiklos efektyvumo klausimas. Atsižvelgus į užsienio draudimo draugijų patyrimą ir Lietuvos siekį integruotis į Europos Sąjungą, analizuojamas draudimo draugijų veiklos įteisinimo Lietuvoje klausimas.A mutual insurance company is formed as a cooperative. Members originally contribute its capital. Unlike a stock company, which is owned by shareholders, a mutual insurance company is owned by its policyholders. Increased competition and consolidation of insurance companies contributed to increased demutualization of mutual insurance companies. A demutualization entails the payment of all the insurer's equity, in the form of cash or stock to its policyholders, followed by recapitalization of the company - typically through an initial public offering (IPO). To attract and retain employees, to raise capital for investments or new acquisitions and generous payouts to policyholders and management are the main reasons for demutualization. Because of the demutualization the market share of a mutual insurance company dramatically decreased in recent years. Minor agency costs, because of non-existing interest conflict between policyholders and owners of the company, better assessment of insurable risks and better product price - quality combination for policyholders are the main advantages of a mutual insurance company. Besides, most studies show that mutual insuranee companies are more efficient than stock insurance companies. Several studies examined the performance of insurance companies between 1995 and 1999 across a number of key business indicators. Following: on business figures, the mutual insurance sector outperforms or provides equivalent performance to its stock market-owned sector across a wide range of business indicators. The most important consequences of the mutual insurance business legitimation in Lithuania were: the predictable consequent increase of the efficiency of Lithuanian insurance sector; the congruence of Lithuanian laws with the laws and regulations of European Union; the positive social consequences and more uniform development of Lithuanian economy