Insurance News, in partnership with Picnic Labs and Our Ark, recently hosted a webinar on alternative risk transfer solutions, focusing particularly on discretionary mutuals. As the traditional insurance market faces ongoing challenges, understanding these alternatives is wise for brokers seeking new ways to add value for their clients.

Charles Pollack, CEO of Picnic Labs, explained the basics of discretionary mutuals, describing them as a form of collective risk protection owned by their members, providing flexibility and customisation that conventional insurance often lacks.

“We design, operate and support discretionary mutual funds (DMFs) for communities, industry groups and brokers looking for alternatives to the general insurance market,” Mr Pollack said, emphasising that DMFs are particularly suited to those seeking tailored risk solutions.

Simone Collins, chief actuary at Our Ark, presented a case study on Our Ark’s rapid growth. She highlighted how the mutual had expanded from one member to more than 160 since launching in 2020, protecting more than $3.8 billion in property across Australia.

“Our Ark was founded to create an alternative to the for-profit insurance market for organisations providing essential services,” Ms Collins noted, adding each member’s risk-based pricing was determined on an individual building basis to ensure sustainability.

The panel addressed several common myths about discretionary mutuals. One is that they are only for “uninsurable” or high-risk properties. Mr Pollack clarified, “What makes something uninsurable can simply be an insurer deciding to exit a market for strategic reasons, not because the risk is inherently uninsurable.”

He emphasised that DMFs such as Our Ark assess true risk without preconceptions, often offering a viable long-term solution.

The audience raised insightful questions, particularly about the discretionary aspect of claims. Ms Collins shared how the discretionary powers of the board had enabled unique, member-focused outcomes, such as approving a cash settlement to relocate a flood-damaged property rather than rebuilding in the same high-risk area.

“Our approach allows us to focus on what’s best for the member,” she said, adding that flexibility in claims management is a key advantage of discretionary mutuals.

If you missed this invaluable discussion, the full 45-minute webinar is now available on demand. It’s an essential watch for brokers interested in learning how alternative risk transfer solutions can complement traditional insurance offerings, particularly as the need for flexible, customer-centric options continues to grow: