An interesting bit of news comes in from across the Pond: the Canadian cooperative financial institution Desjardins, a federation of linked cooperative savings banks focused historically in Québec, has done a deal with the US mutual insurer State Farm to buy the latter’s general insurance business in Canada.
This represents a major expansion of Desjardins’ current insurance business and demonstrates how ambitious its CEO Monique Leroux is at the moment in wanting to extend Desjardins’ business reach and influence. Assuming the deal is given regulatory approval, Desjardins will overtake The Co-operators as the largest general insurance cooperative in Canada (it is already the largest cooperative life insurer).
And there’s another interesting aspect to the deal, and that is that the French company Crédit Mutuel has also been brought into the party. Crédit Mutuel, which already has some small-scale partnership arrangements with Desjardins, is investing 200m Canadian dollars in the business.
Little by little, cooperatives are becoming international in their ways of working.
The news announcement is here.
What are we to make of yesterday’s announcement that the Co-op Group is no longer looking to offload its remaining insurance operation?
Well, given that Britain has had a cooperative insurance business for 147 years, it’s hard not to welcome its continuation (even if the Co-op’s life and pension operation has already been sold, so we’re talking now only of general insurance). Internationally, insurance is one of the strongest – arguably the strongest – business sector in the cooperative family, and if France, Germany, Japan, the US, Canada and most of Latin America (to give just a few examples) can have successful coop insurers, why not Britain?
But I also have to add that I don’t think yesterday’s announcement necessarily represents a change of heart by the Co-op Group, so much as a pragmatic response to the fact that they couldn’t find a buyer offering as much money as they wanted. The Group was adamant under the previous management regime that insurance was no longer part of its long-term strategy, and I’m not convinced that it has suddenly been seen as a core business area after all. And without the bank and life business, the remaining part of Co-operative Insurance is at risk of being seen as something of a poor waif.
So ultimately the Group may well be looking to sell this business. Here’s a thought to ponder: could the capital be found from within the coop movement to relaunch it as a stand-alone cooperative insurer, fully mutual and there to service its customer-members’ needs?