Twenty years ago, small businesses in Australia’s automotive aftermarket had a big problem—it was becoming more difficult, and more expensive, to get insurance. In the wake of the September 11 terrorist attacks on New York’s World Trade Center and the collapse of HIH Insurance in 2001, the global insurance industry’s appetite for risk had radically shifted. Within two years, the situation had become untenable. Capricorn decided to step in, establishing Capricorn Mutual Limited (CML)—a discretionary mutual that could provide an insurance-like product, called risk protection, to Members. That first year CML collected $2.2 million in contributions from 1,000 Members. To put that into some perspective, there are now over 11,000 Members who contributed $122 million in the last financial year alone.

CML is now in the top 50 providers of protection or insurance in Australia. Over the past 20 years, the mutual has written about $875 million in protections and has paid out more than $465 million in gross claims— including $150 million in the last two years, when a large number of Members were hit by natural disaster events.

CML’s purpose is to support Members in their time of need. For example, the 2022 East Coast flood catastrophe was Australia’s largest insurance event on record, with water rising more than 19 metres in some areas and causing more than $6 billion in damages across 230,000 claims. During this time of disruption and upheaval, CML was there, helping over 200 Members to the tune of $37 million in claims payments to keep businesses alive and get Members back on their feet. It also paid a further $5 million to New Zealand Members who were affected by back-to-back catastrophes earlier this year that saw them affected by flooding, landslides and cyclone damage.

Rod Scanlon is the CEO of Capricorn’s Risk Division, which includes CML, Capricorn Insurance Services, Capricorn Risk Services and Capricorn Mutual Management.

Rod Scanlon is the CEO of Capricorn’s Risk Division, which includes CML, Capricorn Insurance Services, Capricorn Risk Services and Capricorn Mutual Management. He said while CML was created at a time when Members were finding it really difficult to get affordable insurance, the mutual has evolved to meet the specific needs of businesses operating in the automotive aftermarket. “We provide a product that meets our Members’ modern day needs, while staying true to our founding principles, and it is this that has ensured we stayed relevant,” he said. “I think we’re also a bit of a shining light in terms of how good mutuals can be run, and we are very proud of that."

 "We recently took part in developing and signing up to an industry code of practice which outlines what a good, sustainable mutual looks like. We’ve got a very strong balance sheet, which means Members can be assured that we have the scale to pay for losses like the big East Coast floods in 2022. Even after returning almost $40 million back to our Members impacted by those floods, our balance sheet, our financial position, has never looked stronger.”

This financial strength also gives CML the opportunity to return excess capital back to Members in the form of a Loyalty Rebate. In 2021, CML returned its first rebate to Members to the value of AU$6 million. In 2022, Members shared another AU$4 million rebate. Being a mutual, keeping Members’ interests first, means CML only takes what it needs and can return what it doesn’t.

Rod became CEO of Capricorn Risk Services in February this year, after originally joining Capricorn in December 2021 as Head of Finance and then spending some time as acting CEO. He’s spent more than 20 years in the insurance industry, including 11 years at Suncorp and he has a lot of experience when it comes to providing protection to people’s businesses, homes, vehicles and other valuables.

“The thing you immediately see (moving from traditional insurance to a mutual) is that at a mutual you’re 100 per cent centering on what’s best for the Member,” he said. “That’s not just around claims time, that’s also about how we design our products and making sure that our Members have every confidence that the products we are providing to them meet their needs and know we’re there for them if anything goes wrong.”

As CML celebrates two decades in operation, Rod said the team is not resting on its laurels.

“Looking forward, our product will continue to evolve,” he said. “We issued a new Product Disclosure Statement in May this year which included six new product offerings for Members. These are things like choice of repairer and hire cars after incidents. We’re making a lot of changes to keep pace with the market and improve our offering.”

The team is working on changes in technology, too. “We’re looking to improve our digital offering, so that in the future Members can adjust their policies and lodge a claim digitally 24 hours a day.” Rod said. “We think that can add real value to Members by improving our digital offering, as we're all time-poor, and removing the need to communicate with us via phone will make things easier and more convenient.”

To find out more about how Capricorn Mutual can help you, please contact your local Risk Account Manager, or call us today on 1800 007 022 (AU) or 0800 555 303(NZ).

Australia:¹Products sold through Capricorn Risk Services Pty Ltd (ABN 91 111 632 789) are: (i) discretionary risk protection products issued by Capricorn Mutual Ltd; and (ii) general insurance products issued by a range of insurers and brokered through Capricorn Insurance Services Pty Ltd. Before deciding to acquire any product, you should consider the Product Disclosure Statement available from Capricorn Risk Services Pty Ltd to see if the product is appropriate for you. Capricorn Risk Services Pty Ltd is a Corporate Authorised Representative (No. 460893) of Capricorn Mutual Ltd (AFSL 230038) and Capricorn Insurance Services Pty Ltd (AFSL 435197). Capricorn Mutual Ltd has published a Target Market Determination for its protection which is available at capricorn.coop/about/capricorn-mutual.

New Zealand:¹Products sold through Capricorn Risk Services Pty Ltd include discretionary risk protection and general insurance products. Discretionary risk protection is issued out of Australia by Capricorn Mutual Ltd. Before deciding to acquire discretionary risk protection, you should consider the Product Disclosure Statement to see if it is appropriate for you. This can be obtained from Capricorn Risk Services by phone 0800 555 303, email info@capricornrisk.com or website capricorn.coop/risk. General insurance products are issued by a range of insurers and are available through Capricorn Risk Services Pty Ltd as a member broker of PSC Connect NZ Limited. Capricorn Risk Services is a registered financial services provider (390466) and a corporate Authorised Representative (No. 460893) of Capricorn Mutual Ltd (AFSL 230038). Capricorn Mutual Ltd has published a Target Market Determination for its protection, which is available at capricorn.coop/about/capricorn-mutual.