What is a mutual?

PAMIA is a mutual insurance company. A mutual insurance company is an organisation owned entirely by its members, who both contribute premiums and directly benefit from any surplus profits, with no external shareholders involved. This structure allows for lower premiums and aligns the company’s interests with those it insures.

A mutual is owned entirely by its members and any surplus profit produced by operating activities is used for the sole benefit of the mutual’s members. Because there are no outside shareholders, premiums can potentially be lower. 

The management of a mutual insurance company is often outsourced to a management company, which provides all the services required to run an insurance entity under the supervision of the mutual’s Board of Directors. For PAMIA, these services are provided by Thomas Miller, an international provider of market leading insurance services managing a number of businesses which are leaders in their chosen market. 

In common with commercial insurance companies, a mutual charges its Members a premium, known as an Advance Call, at the start of each policy period. However, because a mutual cannot make a loss, it has the right to charge Members an additional premium, known as a Supplementary Call, if it requires additional income to pay claims or increase the reserves. 

Over more than 35 years, PAMIA has never made a Supplementary Call and does not expect to have to do so. It reinsures against large claims, to mitigate the risk of any unusually large settlement. 

A mutual’s right to levy a Supplementary Call gives its Members a near guarantee that their claims will be paid.