When commercial insurance premiums fall as sharply as they have in the past year, clients start asking whether they are getting the best deal. Australia’s peak mutual body says that question deserves a more complete answer than a premium comparison.
The Business Council of Co-operatives and Mutuals (BCCM) published its Discretionary Risk Mutuals Pulse Check 2025/26 on September 17, reporting $416 million in combined member contributions for FY25 – a 10% increase year-on-year. The sector covers more than 150,000 Australian businesses, organisations, and individuals.
The contribution figures are solid. The sharper content in the report, though, is directed at intermediaries.
The report, produced with law firm Hamilton Locke, warns that brokers moving clients out of discretionary risk mutuals during soft market cycles “are undermining the long-term benefits of being a member of a mutual.”
It states plainly: “A transactional mindset to buying the cheapest possible protection is not how mutuals work.”
The pricing context gives that statement weight. Corporate property premiums fell an average of 5% to 10% in FY25. Directors and officers and professional indemnity rates dropped an average of 8%. General liability fell an average of 6%. All three lines recorded their first declines since 2016, according to the report.
For a DRM member, cheaper traditional cover now looks competitive on headline price. What a premium comparison does not surface is accumulated capital – the pooled reserves a member forfeits on exit, built over years to absorb hard market cycles and reduce long-term protection costs for remaining members.
That argument carries weight outside the mutual sector, too. EBM Insurance & Risk, in its May 2026 Insurance Market Trends and Outlook report, made a comparable point about traditional insurer relationships – noting that “insurer appetite can shift quickly if market conditions deteriorate, and that insurers who provided consistent support through harder market cycles may warrant continued consideration.”
The BCCM’s position is that the same logic applies to mutual membership, and that brokers carry a responsibility to put that trade-off clearly in front of clients.
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Ninety-three percent of reporting mutuals recorded membership growth in FY25, up from 87% in FY24. The BCCM notes this partly reflects better data collection and higher participation rates among mutuals this year, so direct year-on-year comparison carries some caution.
DRM contribution growth of 10% outpaced the broader general insurance market. The Australian Prudential Regulation Authority’s (APRA) quarterly general insurance performance statistics show industrywide insurance revenue rising from $19.3 billion in the March 2025 quarter to $20.5 billion in December 2025.
The largest DRMs by FY25 contributions were Capricorn Mutual ($154 million, automotive businesses), Unimutual ($85 million, educational institutions), Civic Risk Mutual ($55 million, local government), Asservo Mutual ($45 million, individuals), and Our Ark Mutual ($20.3 million, community organisations).
Fifty-seven percent of mutuals reported a surplus in FY25, down from 67% in FY24. The BCCM flags this may reflect data inconsistency across survey years rather than a structural shift and has committed to monitoring the figure into FY26.
Where surpluses were generated, 57% directed them toward risk management programs and retained earnings. Only 27% applied funds to rebates or contribution reductions – a shift away from short-term member returns.
The BCCM’s view is that retained surpluses signal financial discipline to the reinsurance market – the signal that matters most when a mutual seeks to maintain or extend its reinsurance program.
Eighty-five percent of reporting mutuals have reinsurance arrangements. Sixty-two percent held multiple arrangements in FY25, up from 50% in FY24 – combining local excess-of-loss cover (used by 91%), catastrophe programs, offshore reinsurers, and captive insurers.
Five mutuals have issued Mutual Capital Instruments since the share class was legislated in 2019, raising $10.1 million toward start-up capitalisation.
The Australian Securities and Investments Commission (ASIC) has proposed extending dollar disclosure exemptions – currently available to general insurance products under ASIC Corporations (Disclosure in Dollars) Instrument 2016/767 – to risk products issued by discretionary mutual funds. The consultation closed in June 2026. The instruments expire on October 1, 2026, and no final decision had been announced at time of publication. If the extension proceeds, DRMs would present costs in a Product Disclosure Statement (PDS) on the same regulatory footing as licensed insurers.
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Hamilton Locke partner Charmian Holmes, who co-authored the report, noted uneven conditions among newer mutuals. “Last year’s theme of innovation continues for underserved segments for example, gig workers, such as rideshare, taxi, food delivery, and courier drivers, but it is not always clear sailing to form a viable mutual. There are some groups that may face challenges in terms of reaching the necessary scale for long-term growth and success,” Holmes said.
Two new mutuals launched in FY25 and one entered liquidation. Consolidation among smaller mutuals in the same industries was flagged as a trend to watch in FY26.
Sixty-three percent of identified mutuals are under 10 years old, with many reporting contribution growth of 50% to 100%. Those over a decade old– 37% of the identified sector – mostly recorded growth of 0% to 20%.
