Designing a long-term plan for a member-owned insurer that has no share price

I joined a mutual insurer in the Netherlands eighteen months ago after years in listed companies, and designing a long-term incentive without shares has been more interesting than I expected.

What we have settled on is a three-year cash plan with four measures: solvency ratio kept within a target range (pays nothing if it falls below, and nothing extra for running above), combined ratio against a peer set of seven, member retention, and a cost per policy target. Payment is deferred a further two years and subject to reduction.

The hardest design choice was whether to reward growth at all. We decided not to. I would like to hear how other mutuals and cooperatives think about that.