Mutual insurance group company (France, SGAM)
A French legal structure allowing mutuals and mutual insurance companies, which have no share capital, to form a prudential group by establishing strong and lasting financial solidarity links among themselves.
A classic insurance group forms through capital ownership: a parent company owns its subsidiaries. Mutuals and mutual insurance companies have no shareholders and cannot be bought; their combination therefore cannot occur through a capital takeover. The mutual insurance group company, introduced into the Insurance Code in the early 2000s and later strengthened, solves this difficulty. Affiliated entities keep their legal personality and members, but join an umbrella structure that exercises dominant influence through coordination, sets group strategy and organizes strong and lasting financial solidarity links among members: if one is in difficulty, the others must support it. This link underpins recognition as a group under Solvency II, with prudential supervision and solvency assessed at consolidated level, which allows the benefit of diversification. Several large French mutual groups are organized this way. Financial solidarity is also the model's main constraint: an affiliated entity can no longer manage its own funds in isolation, and a crisis in one part of the group can call on the support of all.
Textbook case: three regional mutuals form a mutual insurance group company. Their solvency is now assessed at group level: when one suffers exceptional losses after storms, the other two provide it with own funds, in line with the solidarity commitments in the affiliation agreement.
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