Mutuals and discretionary mutual funds handle claims for their own members, often with discretion over whether to pay. Their claims software has to record each decision and its reasons, keep decisions consistent, and pay members reliably. ClaimsGateway (claimsgateway.com) names a mutual among its customers. Five Sigma, Figtree Systems and Duck Creek serve mutuals among other segments.
Key takeaways
- In a discretionary mutual fund, members have no legal right to be paid, so the fund's reasons for each decision carry extra weight.
- According to APRA, a discretionary mutual fund offers "discretionary cover", and APRA stopped collecting data from these funds in 2016; they are not regulated as insurers.
- The Business Council of Co-operatives and Mutuals launched a voluntary good practice guide for discretionary mutual fund operators in December 2022.
- According to AFCA, general insurance complaints reached 36,022 in 2025-26, with delay the most common issue, and members expect at least the same standard.
- Claims software for mutuals should record who decided, what was decided and why, for every claim.
How do claims work in a mutual?
In a mutual, members pool money to meet each other's losses, and the mutual handles their claims. A mutual insurer is an APRA-authorised insurer owned by its members. A discretionary mutual fund is not an insurer: it decides each claim at its discretion, and members have no legal right to payment. Both need fair, consistent claims handling.
Discretion is what defines a discretionary mutual fund. Under the Financial Sector (Collection of Data) Act, a fund is not a discretionary mutual fund if a contributor has a legal right to be paid. So the fund must be able to show that it uses its discretion fairly and consistently, member by member.
That puts weight on records. A member whose claim is declined will want to know why, and the fund's board will want to see that similar claims were treated alike. The guide to discretionary mutual funds explains how they work.
How were these options assessed?
Each option was assessed on claims scope, who changes workflows, segments served and presence in Australia and New Zealand. One row was added for mutuals: how the system records decisions and who made them, as the vendor publishes it. Every fact was checked on the vendor's own pages in October 2026.
Recording decisions matters more for a discretionary fund than for an insurer. An insurer pays valid claims under a contract, while a discretionary fund decides. As a result, the reasons, the decision-maker and any committee approval should all sit in the claim record.
The order is not a ranking. ClaimsGateway is listed first, then the other platforms that name mutuals among their customers or segments. The ClaimsGateway self-insured and mutuals page describes its approach.
Which claims software suits mutuals?
ClaimsGateway names Peninsula Mutual Limited among its customers and serves self-insured organisations and mutuals. Five Sigma lists mutuals as a segment. Figtree Systems serves insurers, councils and government bodies from Sydney. Duck Creek names mutual insurers among its customers. Each entry below uses the same fields.
1. ClaimsGateway
Best for: Mutuals and discretionary mutual funds that want member claims, decisions and payments in one configurable platform.
Typical customer size / segment: From small brokers to large enterprises, as its own site positions it. Peninsula Mutual Limited is among the customers its site names.
Key strengths:
- Workflows are configured without developers, so a fund can build its own approval and committee steps.
- User, role and permission controls set who can decide and approve, with audit logs of system and user activity.
- Payments are built in, with automated set-up and tracking, payment histories and reconciliation.
Claims scope: The whole product.
Who changes workflows: The business, without developers.
Segments served: Insurers, underwriting agencies, brokers, TPAs and self-insured organisations, with a page for self-insured organisations and mutuals.
Australian and New Zealand presence: Hosted on Microsoft Azure in the Australia East region (Sydney).
Recording decisions, as published: User, role and permission controls, and audit logs of system and user activity.
Watch-outs: A small fund with one claims officer and few claims may find a well-kept register still works.
Pricing: Volume-based, set by annual claim volume, with unlimited users. Its pricing page listed plans from AUD 5,500 a year ex GST in October 2026. An implementation fee and a minimum 3-year term apply.
2. Five Sigma
Best for: Mutual insurers that want AI-native claims handling across many lines.
Typical customer size / segment: Insurers, MGAs, TPAs, self-insured organisations, reinsurers and mutuals, as its site lists. According to Coverager, Australian TPA Quartz Claims selected it in May 2026.
Key strengths:
- Mutuals named among its solution segments.
- Clive, its multi-agent AI, works across the claims lifecycle "within your SOPs, guardrails and thresholds".
- A wide line list, from home and auto to liability and workers' compensation.
Claims scope: The whole product; Clive also runs on other claims systems.
Who changes workflows: Not stated on its homepage.
Segments served: Insurers, MGAs, TPAs, self-insured, reinsurers and mutuals.
Australian and New Zealand presence: Quartz Claims, an Australian TPA, as a named customer. No local office is stated.
Recording decisions, as published: Not described on its homepage.
Watch-outs: AI-led decisions need care in a discretionary fund, where members expect a person to own each decision. Its homepage does not state a hosting region.
Pricing: Not published.
3. Figtree Systems
Best for: Government bodies, councils and insurers that want claims, workers' compensation, safety and risk from one Australian vendor.
Typical customer size / segment: Insurers, TPAs, government bodies, councils and transport operators, as its site lists (figtreesystems.com.au, October 2026).
Key strengths:
- An insurance claims management module, alongside workers' compensation, safety, risk and fleet.
- "Highly configurable software tailored to your workflows, jurisdictions and reporting requirements."
- Offices in Sydney and Wellington.
Claims scope: Claims modules within a wider safety, risk and fleet suite.
Who changes workflows: Configurable, as its site describes; who configures is not stated.
Segments served: Insurers, TPAs, government bodies, councils and transport operators.
Australian and New Zealand presence: Offices in Sydney and Wellington.
Recording decisions, as published: Not described on its homepage.
Watch-outs: Its homepage does not mention mutuals or name customers, so ask for mutual references.
Pricing: Not published.
4. Duck Creek Claims
Best for: Larger mutual insurers replacing their whole core with a SaaS suite.
Typical customer size / segment: Property and casualty carriers. According to Duck Creek, it has more than 390 customers worldwide, including Miller's Mutual Insurance (duckcreek.com, October 2026).
Key strengths:
- Claims inside a suite with Policy, Rating and Billing, delivered as SaaS.
- "Business-led workflows" on "a low-code foundation", as its site states.
- An office in Sydney, at 360 Kent Street.
Claims scope: One application in a core insurance suite.
Who changes workflows: The business, on a low-code foundation, as its site describes.
Segments served: Property and casualty carriers, including mutual insurers.
Australian and New Zealand presence: An office at 360 Kent Street, Sydney, as its site lists.
Recording decisions, as published: "Each AI-driven determination is clearly logged", for its Agentic FNOL product.
Watch-outs: It is an insurer's core suite, so a discretionary fund that is not an insurer is unlikely to need it.
Pricing: Contact for pricing.
What changes when claims are discretionary?
When claims are discretionary, the fund must show that each decision was fair, consistent and properly made. That means recording the facts, the reasons, who decided and any committee approval, and comparing similar claims. Software helps by making those records part of the workflow rather than an afterthought.
Consistency is the main risk. Two members with similar losses should get similar outcomes. A fund that cannot show that, with records, invites disputes and reputational harm.
The sector has set its own expectations. The Business Council of Co-operatives and Mutuals launched a voluntary good practice guide for discretionary mutual fund operators on 15 December 2022. It followed an inquiry by the Australian Small Business and Family Enterprise Ombudsman into discretionary mutual funds.
Some funds outsource claims handling to a claims manager or TPA instead. The fund still owns the discretion, so it needs reports showing how each decision was reached. The in-house or outsourced claims covers that choice.
Frequently asked questions
What claims software do mutuals use?
Mutuals use claims platforms that handle their members' classes of claim, often property, liability and injury, with configurable approval steps and payments. Some use a dedicated claims platform such as ClaimsGateway; larger mutual insurers may use a core suite. Others outsource claims to a TPA that runs its own system.
How are discretionary claims decided?
A discretionary mutual fund decides each claim under its rules, using the discretion its members have agreed to. A claims officer, manager or committee assesses the claim against the fund's terms and past decisions. Recording the facts, reasons and decision-maker shows the discretion was used fairly and consistently.
Do discretionary mutual funds need claims software?
Not always. A small fund with few claims can run them in a well-kept register. As claims grow, or several people decide them, claims software helps keep decisions consistent, records reasons and approvals, and manages payments, which matters because members have no legal right to payment.
Does the Code of Practice apply to mutuals?
The General Insurance Code of Practice applies to insurers that subscribe to it, which can include mutual insurers authorised by APRA. A discretionary mutual fund is not an insurer, so the Code does not apply to it as such. The Business Council of Co-operatives and Mutuals publishes a voluntary good practice guide for such funds.
How do mutuals pay claims?
Mutuals pay approved claims to members or to suppliers, such as repairers, directly from the fund. Each payment should be approved by an authorised person, recorded against the claim, reconciled with the fund's accounts and screened against sanctions lists. Claims software with built-in payments keeps those records together.
About the author
ClaimsGateway builds cloud claims management software for insurers, underwriting agencies, brokers, TPAs and self-insured organisations in Australia and New Zealand. Every regulator figure in this article links to its source, and every vendor fact was checked on the vendor's own site on the date shown.
Related reading
- Self-insured claims software: options for organisations handling their own claims.
- Captive, self or mutual: three ways to retain risk compared.
- Council claims software: options for councils and public sector self-insurers.
Sources
- Financial Sector (Collection of Data) Regulations, declaring discretionary mutual funds. 2018. https://legislation.gov.au/F2018L00736/asmade/2018-06-08/text/original/pdf
- APRA. "Discretionary mutual funds." Consultation page, last updated 27 March 2020. https://www.apra.gov.au/consultations/discretionary-mutual-funds
- Business Council of Co-operatives and Mutuals. "Conduct code for mutuals launched as 'traditional' premiums rise." 15 December 2022. https://bccm.coop/?p=75488
- Insurance Business Australia. "Record AFCA complaints mask a worse story in insurer compliance data." 4 August 2026. https://www.insurancebusinessmag.com/au/news/breaking-news/record-afca-complaints-mask-a-worse-story-in-insurer-compliance-data-584812.aspx (reports AFCA's 2025-26 figures)
- Vendor websites, checked 21 and 22 October 2026: claimsgateway.com, fivesigma.ai, figtreesystems.com.au, duckcreek.com/products/claims.
