Local Government Mutual: find out more

Councils currently spend hundreds of millions of pounds on insurance nationally. A mutual would be owned and controlled by its members, and professionally managed by Financial Conduct Authority (FCA) authorised industry experts.


We are now inviting a small number of local authorities to become founding members alongside the LGA and help the new mutual prepare to open for business.

Why a mutual?

There is good evidence that a mutual will be able to:

  • be 100 per cent member focused and save local authorities money
  • offer matching or better cover that is up to date with changes in local authorities’ organisational and operational activities
  • reduce typical members’ risk exposure without increasing their costs
  • guarantee caps on losses each year and eliminate uncertainty over losses in future years
  • build up a financial surplus that may be used to reduce the cost of protection or improve members’ claim experience – or be taken back as income.

Founding members will:

  • provide a senior elected member to join the new mutual’s board
  • be involved in the establishment of the governance and management arrangements
  • oversee the launch of the new mutual’s offer to the sector.

We are not asking founding members to change their insurance arrangements – the mutual’s board will operate a methodical admissions process. It is expected that the mutual would accept its first full members within months of it being formally constituted.


Case study: The Fire & Rescue Indemnity Company (FRIC)

In 2015, nine fire authorities launched a mutual, The Fire & Rescue Indemnity Company (FRIC). FRIC has the same objective - to provide an alternative to traditional commercial insurance products and services and enable the fire authorities to enjoy greater control and a more collaborative management approach over the risks they protected.

After only one year of trading the members of the mutual have already achieved a surplus of 12.5 per cent of their contributions (£471,428).The success of the initiative has also received industry recognition after being shortlisted for Best in Alternative Service Delivery Model category at the Public Finance Innovation Awards 2017.