Mutual insurers may be making a comeback after decades of declining market share, according to a Swiss Re report.

In recent years growth in cumulative premium written by mutual insurers has outpaced the wider insurance market, with much of the outperformance achieved at the height of the financial crisis in 2008/09.

Swiss Re Chief Economist Kurt Karl says the trend has not reversed since, suggesting some permanence to the mutuals’ recovery.

“Some mutual groups have expanded internationally in recent years and new mutuals have been established in a number of markets, another indication of the segment’s renewed popularity,” he said.

Mutual insurers’ primary purpose is to provide risk protection for owner-members, rather than make profits or provide returns to external shareholders.

Their share of the overall insurance market increased to 26% of direct premium written in 2014 from 24% in 2007, Swiss Re’s latest Sigma report says.

But challenges include adapting to new risk-based capital requirements and more stringent corporate governance rules, which may put some mutuals at a competitive disadvantage compared with larger, more diversified insurers that are in a stronger position to manage extra compliance costs.

Swiss Re says mutual insurers must also embrace technological disruption, with laggards potentially losing out to those better placed to harness benefits. “Exploiting social media and smart analytics to better understand the needs and preferences of customers should be a natural fit for mutuals, given their underlying purpose.”

Mutuals’ market share remains well below the levels seen before a wave of demutalisations across a number of countries. In the life sector, for example, the share was about 23% in 2014, compared with about 66% in the late 1980s and 1990s.