Insurance by union

[TrueBlueTerrier]

http://www.dailywaffle.co.uk/2012/12/in ... +WAFFLE%29" onclick="window.open(this.href);return false;

When you think about it, there isn’t a lot of difference between the principles behind the establishment of the trade unions and the overall principles of insurance. Both are collective vehicles in human society which seek to provide care, in one form or another, for those least fortunate among us (or downright unlucky in the case of insurance claim needs) and who lack the means to protect or care for themselves in certain circumstances.

Broadly speaking, the principles are the same. But with private insurance companies, that’s where the similarities end. Private insurers (including publicly-listed insurance companies) exist to create a profit. They do so by carefully calculating risks and taking insurance premiums which cover that risk, building in a margin.

Of course, all insurance organisations work in the same way. But the focus of private insurers is on bottom line profit – and this comes from making an operating profit on insurance activity and in investing the collective pool in other investment vehicles to create more profit. Shares of these profits are then paid out in regular dividends to the company’s shareholders.

But when an insurer is a mutual society, it is a collective vehicle jointly owned by the members for their mutual benefit only. There are no “profits” as such, as any proceeds are ploughed back into the organisation for the further mutual benefit of all members.

It seems fitting, therefore, that the trade union movement has long held its own insurance organisations, such as UIA Insurance and that this continues with mutual societies to the present day. This is the true socialist principle still alive and well in today’s mainly commercially-driven world, and working to good effect.

Such is the case with Unison Insurance, for example. UNISON is the trade union formed in 1993 from the merger of three former unions; NALGO, NUPE and COHSE. UIA Insurance now provides insurance for members of UNISON and other not-for-profit organisations (including Unite, Usdaw, NASUWT, CWU, RMT, Ramblers’ Association, FBU, BFAWU and NAPO) on a mutual basis as seems perfectly fitting given the founding principles both of the trade union movement and that of mutual societies.