Mutual insurers and member-owned businesses drive competition and provide a remedy when the market fails, Regis Mutual Management has told a Senate inquiry.

And Unimutual, which is managed by Regis, has told the economics committee inquiry into co-operative, mutual and member-owned groups the discretionary mutual model can enable an industry to get commercial insurance at an affordable price.

Regis CEO Gerald Ewing, a member of the Northern Australia Insurance Premiums Taskforce, has proposed legislation to allow a special class of investor-deferred shares for mutuals, to enable them to raise capital. Regis specialises in establishing and managing mutuals here and in the UK, and he says this mechanism to raise funds works in Britain.

Mr Ewing says encouraging sectors or groups to form mutuals can prevent calls on governments if markets fail. “Mutuals can form the model for insurance protection currently provided by government to be transferred to community ownership,” he says.

Unimutual is owned by 27 universities and 25 associated entities such as research institutes and residential colleges, and says it covers risks no other insurer will meet, such as for research material.

The mutual covers assets valued at more than $60 billion and has paid $200 million in claims since it was founded in the 1980s, when universities could not get adequate cover.

“Mutuals have a strong focus on risk loss prevention and mitigation,” it says. “This is partly because, through the mutual, members have ‘skin in the game’ via the pooling arrangement.”

Its submission says an independent study found Unimutual achieved a 12% saving over the cost of conventional insurance.

Unimutual covers property, business interruption, product and professional liability, medical and veterinary malpractice, clinical trials, cyber and management liability risks.