The mutual continued to focus on developing its customer offer, notably achieving new business sales of £3.4million for its market leading Over 50s Life Cover product, achieving year-on-year growth of five per cent. The product was recently awarded a coveted maximum five stars by independent financial product researcher, Defaqto, in its first whole of market over 50s life cover assessment.
Chief executive, Peter Burrows summarised:
“Engage Mutual continues to thrive in difficult economic times. In 2013 we grew our core Over 50s life insurance sales by five per cent, delivered a strong trading surplus, and maintained a robust balance sheet with capital headroom of more than three times regulatory requirements.”
In pursuit of its goal to make its mutual status even more meaningful, Engage celebrated a major milestone in 2013, announcing the launch of the Engage Foundation.
Peter continued, “Our ongoing financial strength has enabled us to begin to take tangible steps to allow our customers to benefit directly from our mutual status. We have recently established the Engage Foundation, whereby we have committed a fund of £1 million for the exclusive benefit of our customers. We hope that this brings to life the real benefits of belonging to a mutual, and will allow our customers to share in the financial success of their business above and beyond their policy terms and conditions.”
New business sales:
New business premium income totalled £5 million, an expected drop from £5.3 million in 2012 due to the decline of historic savings products.
A continued focus on long term strategic growth areas, however, continued to pay off. Over 50s life cover achieved five per cent growth to £3.4 million. The health business enjoyed a 36% increase in sales to £800,000.
Premiums and claims:
Growth in the mutual’s Over 50s and health premiums was offset by an expected decline in savings premiums, with total premiums of £55.4million down four per cent.
Claims paid to customers over the year totalled £95 million. This was made up of £46.5 million of life insurance benefits, and £43 million in maturing investment policies. Health benefits accounted for the remaining £5.5 million of this figure.
Both With Profits Funds continue to use their capital strength toreturn excess capital to the funds’ customers. Typical enhancement rates to pay outs were 12.5% in the With Profits I Fund and 9% in the With Profits II Fund.
The overall cost base stood at £20.4 million, level with that of last year (2012: £20.3 million). This reflects Engage Mutual’s continued drive for efficiency in administering customers’ policies, simplifying existing processes, and targeting a cost efficient strategy on new business distribution.
Capital and assets:
At year end, Engage Mutual had available capital of £93.9 million, a 17% increase on the previous year. Available capital remains in excess of three times that which it is required to hold by financial services regulation, giving its customers reassurance that Engage will be there for them for the long term.
Group assets remained stable at £933 million, a slight increase on the prior year (2012: £931million).
Surpluses generated by the business are held in the fund for future appropriations, to be used for the future benefit of members. This grew by £11.9 million over 2013 to £95.8 million, supported by positive market and economic movements.
The organisation’s commitment to providing outstanding customer service was again recognised in the 2013 LAMRA survey, the leading independent survey of customers across the life insurance industry.
Engage rated as one of the top insurers for customer satisfaction, beating mutual and plc industry peers alike. The survey revealed 93% of customers think Engage is trustworthy, 92% rate its customer service as good or higher, and 91% agree that they are treated fairly.
CEO, Peter Burrows continued: “As a mutual, our customers are the owners of our business, and our commitment to them is paramount. Independent customer surveys demonstrate that we continue to be one of the top rated life assurers – indeed, in 2013, we were rated as the best business at dealing with its customers’ claims, which is typically the point at which our customers most need our help and support.”
In January 2014, Engage Mutual underlined a long term commitment to making its customers’ lives better, with the announcement of the £1 million Engage Foundation. Made possible by its ongoing financial strength, the Foundation is an exclusive benefit for customers. Customers can apply for personal grants of up to £500, and can also support community projects with awards of up to £25,000.
Engage Mutual is building a reputation as an outstanding employer. In its annual staff engagement survey, undertaken by an independent third party, the organisation once again enjoyed enviable results, which placed it in the top quartile of global companies.
During 2013, Engage Mutual joined the elite rank of Investors In People Champions, reflecting its dedication to employee development, and its growing reputation as an outstanding promoter of IIP values. The mutual is one of only 12 organisations in Yorkshire and Humber to hold the standard.