A new specialist mutual development unit and free pre-application help are among a series of initiatives from financial regulators to support government plans to double the size of the mutuals sector.
The mutual insurers’ share of the UK insurance market has remained stable over the last 10 years at around 6% of total assets and 5-6% of total premiums, according to the regulators.
However, the number of mutual insurers has fallen sharply from 154 in 2016 to 93 in September 2025, with the decline mainly due to the exit of the very smallest mutual insurers.
Notably, the three largest insurance mutuals account for 84% of the sector’s assets, while the remaining 90 account for just 16%.
To support the growth of the sector, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have produced a joint report setting out their plans.
These include:
- A new FCA Mutual Societies Development Unit that will act as a central hub to help mutuals navigate policy and legislative changes. It will support initiatives such as co-operative networks that enable mutuals to collaborate, grow and build resilience.
- Free pre-application support for new mutual societies, innovating their business models, or seeking guidance applying for targeted support permission.
- A cut in application times for new societies – from 15 to 10 working days, encouraging more society registrations through the FCA’s Mutuals Society Portal
- A review of mutual credit union regulations, considering more risk-based capital requirements for larger, complex firms and proportionality for smaller credit unions..
- The removal of the Building Societies Sourcebook from the PRA rulebook.
The changes are in response to the Labour government requesting regulators review the rules governing mutual organisations to “unlock the full potential of the mutual and cooperative sector in the UK”.
In November 2024, then Economic secretary to the Treasury Tulip Siddiq wrote to the FCA and PRA chief executives to request a report by the end of 2025.
Launching the report and actions, FCA chief executive Nikhil Rathi (pictured) said supporting the sector by streamlining regulation and increasing expert support should encourage new entrants into the market and help the sector grow.
“The mutuals sector is remarkably diverse and rooted in the communities and members it serves. They support people to buy a home, insure against the worst events, increase financial inclusion and bring communities together, whether in the club, pub or on an allotment,” he said.
“We want to help them grow, and our new development unit will provide dedicated support. We’re also making it faster for mutuals to start-up.“
Sam Woods, CEO of the PRA and deputy governor at the Bank of England, added that mutuals were a vital part of the financial system.
The government has responded positively to the measures.
“We have committed to double the size of the mutuals sector, and are pleased the regulators are taking concrete steps to support the sector’s growth so it can deliver better value for members and communities,” said Lucy Rigby, Economic Secretary to the Treasury.
The regulators argued these announcements built on existing initiatives to support mutuals and the wider financial sector, including:
- Joint proposals to streamline the Senior Managers and Certification Regime to support competitiveness.
- The launch of the Scale-up Unit, providing tailored support to firms with growth ambitions.
- The PRA’s Strong and Simple rules, on capital requirements for smaller firms.
- The PRA’s introduction of Solvency UK.