New Business Sales
In a challenging economic climate, Engage Mutual grew its sales by 14% year on year, with new business annual premium income rising to £5.3m.
Within that total, sales of its over 50s life insurance product grew 50% year on year to £3.2m, whilst sales in its fledgling health business grew 36% to £0.6m.
Premiums and Claims
An anticipated fall in contributions received into child trust fund accounts following the Government’s closure of the scheme, together with a decision to refer customers with maturing pension plans to a specialist third party provider in order to help secure them the best possible retirement annuity, saw overall premium income reduce by 10% to £57.4m.
Claims paid out to customers across all products totalled £86.5m, comprising £36.2m of life insurance benefits, £5.2m of health benefits and £45.1m of maturing savings and investments. The fall from last year, when claims totalled £101.8m, is largely due to a reduction in the number of savings and investment products that matured in the year, and as such does not represent a decline in member benefits.
Engage Mutual’s total cost base of £20.3m was 1% more than in 2011. This represents a fall in real terms, and when considered alongside the 14% growth in new business sales, demonstrates effective ongoing cost control.
Capital and Assets
At the year end, the organisation had available capital resources of £79.9m, representing nearly four times that which it was required to hold by financial services regulation. This gives its customers peace of mind that Engage Mutual will be there for them in times of need.
Total assets grew by 1% over the year, to £931m.
Any surpluses generated by the business are taken to the fund for future appropriations (FFA), to be used for the future benefit of members. The FFA ended the year at £83.9m, broadly in line with the prior year figure of £84.5m.
Acting chief executive Peter Burrows commented,
“As a mutual organisation, owned by our customers, we are not driven by a need to maximise profitability. Our aim is to have a positive impact on our customers’ lives through simple, good value products underpinned by excellent customer service. The foundations for this are a strong capital position and continued investment in the future of the business.
“Our 2012 results demonstrate a robust performance in challenging times. We have enhanced our core life insurance product and grown our sales whilst controlling our costs. Our capital position remains enviably strong, to the extent that we continue to use some of that capital strength to improve returns to savers through a combination of enhanced policy values and a reduction in contractual charges across a range of product types. In parallel, we are continuing to invest in our future, most notably in our health business.”
The organisation’s strong customer ethos was recognised in the 2012 LAMRA survey1, the leading independent survey of customers across the life insurance industry.
Engage Mutual rated as one of the top insurers for customer satisfaction, beating mutual and plc industry peers across satisfaction measures that included fairness, customer care, and overall customer satisfaction.
Customer numbers, at 499,000, were marginally down on the prior year.
Engage Mutual is building a reputation as an outstanding employer. In its annual survey of its entire workforce, undertaken by an independent third party, the organisation recorded feedback results that benchmark it in line with the top quartile of businesses2. Furthermore, during 2012 the organisation was awarded the prestigious Investors In People Gold award. It is now one of just 600 organisations nationally, with only 50 from Yorkshire, who have been awarded the Gold standard following independent Investors In People assessment.
The total number of staff employed by the mutual in 2012 increased to 212 from 189 at the end of 2011.
The organisation’s programme of product innovation to provide better customer benefits continued. Its over 50s guaranteed life cover was enhanced to give customers the ability to access their sum assured in the event of terminal or critical illness. This differentiating feature makes the policy useful in life. The product also includes an option to use the services of a personal nurse adviser.
Engage Mutual further developed its corporate health cash plan offer, securing a number of new corporate accounts including O2. It also launched its over 45s surgery cover product, providing an alternative for customers who either do not wish or cannot afford to pay for full private medical insurance, but desire cover for the most common surgical procedures required by the over 45s.
The organisation continued to work with partners for the benefit of customers. Over 50s life insurance holders can claim £250 towards a funeral arranged through The Co-operative Funeralcare, free of charge when they register for a funeral funding option on their plan. In response to feedback it also extended the range of products available to its customers with the option to purchase a separate, pre-paid funeral plan.
A range of community initiatives were delivered during the year. These included a pilot website ‘engagewithyoucom’, which provided an online environment for customers to access help and information, and share experiences and support, regarding the care of elderly relatives. Alongside this, its ‘engage with your community’ programme offers customers the chance to win support and funding for a good cause with which they are personally involved. Initiatives such as these are laying the foundations for an increasing community focus.
Engage Mutual also continued its support of two significant charities – Saint Michael’s, a local hospice meeting the needs of people in Harrogate and the surrounding area for end of life care and support, and the Steve Prescott Foundation, which fundraises for The Christie (cancer care, research and education) and the Rugby League Benevolent Fund.
The end of the year also saw Andrew Haigh step down after 10 years at the helm, with finance and operations director Peter Burrows taking over as acting chief executive.
“The organisation owes huge thanks to our former chief executive, Andrew Haigh. In his ten years as chief executive, Andrew increased the scale and range of the business, launched the Engage Mutual brand, and more than doubled our customer base to its current level of around half a million customers. He leaves us in a strong capital position and with a clear vision of our future.”