AFM conference - a full report
AFM conference - a full report
Association of Financial Mutuals -
Report on 2010 Conference and Annual General Meeting
For two days in October the Association of Financial Mutuals took over the full conference suite of the impressive and prestigious Merchant Taylors’ Hall in Threadneedle Street, London. Around 200 people in total attended the inaugural AFM conference and AGM, and the menu booking system allowed them to choose those elements of the agenda of greatest interest.
The conference was a great opportunity for AFM to showcase how much progress it had made in its first nine months of existence. It was therefore an opportunity to unveil our new Corporate Brochure, and a new video that highlights the value of mutuals- the video will appear on the AFM website shortly.
The conference also launched a new training portal for members and a new version of the Annotated Combined Code for Mutual Insurers. We also used the conference to launch our new website for children, the Saving Squad, and a report on “Diversity in Financial Services” that AFM part-sponsored. It has also lead to some good work and discussion about other outputs that will be unveiled over the coming weeks and months.
Smaller mutuals and friendly societies seminar
The first afternoon of the conference was given over to a seminar for smaller mutuals and friendly societies, and was chaired by Paul Hudson, CEO of Cirencester friendly.
Ian Marshall, Senior Adviser for the FSA was the first speaker. His speech centred on:
- Responsibilities of directors;
- Competence and integrity;
- Internal audit and risk committees;
- Increasing international framework;
- Retail Distribution Review;
- Project Chrysalis.
There then followed an investment panel, with short presentations from Heinz Schmid of BNP Paribas, Duncan Gwyther of Quilter, Robin Griffiths of Cazenove Capital and John Haynes of Rensburg Sheppards. This produced some very interesting differences of opinion, but also strong areas of consistency. In particular the presentations highlighted that whilst the investment world is returning to some form of normality, the cycles have been more acute recently, the future is more uncertain, and that the continued rise of the Asian markets will have a lasting impact.
The final session of the day centred on short presentations around the theme of “Better Business”:
- Nigel Benton of the National Skills Academy introduced the navigator model, which helps firms better understand their strengths and weaknesses, and which has recently been piloted by Cirencester friendly and National Friendly.
- Paul Ormerod of Volterra Consulting covered fat tail events, and explained how these better explains extreme events that normal distributions- this is particular useful in assessing things like reverse stress tests.
- Catriona Razic of inmarkets spoke next and introduced the new AFM e-learning pilot. The training portal will be unveiled soon and will allow each AFM member five user courses each, to help assess well the training platform meets the sector’s needs and might thereby be extended.
- Roger Comber of OAC Actuaries and Consultants provided the final presentation of the today, with an informative update on the status of the Retail Distribution Review, and an assessment of its implications for the sector.
The AFM Chairman, Mike Yardley opened the first AFM Conference and welcomed attendees. His first duty was to explain that the keynote speaker for the day, Mark Hoban, Financial Secretary to the Treasury, had had to send his apologies as he was needed on urgent government business in Brussels. The agenda had been revised a little as a result, and the first presentation was an update on AFM activity by AFM Chief Executive Martin Shaw.
There then followed presentations by two sides of the regulatory environment, with Ken Hogg, Director of Insurance at the FSA followed by Natalie Ceeney, CEO of the Financial Ombudsman Service.
Ken Hogg opened by stating that the “mutual proposition is a strong one. I believe you can adapt to the changes coming”. Ken then went on to talk about with profits in general, and Project Chrysalis in particular, before drawing on other key regulatory themes of the moment- Solvency II and the Retail Distribution Review.
Natalie Ceeney asked firms to think about complaints in the right way- they are an opportunity to make a customer more loyal and to tell people how well problems are resolved. AFM members account for only 1% of complaints received by the FOS, and have a much lower proportion of complaints overturned.
Delegates then had a choice of breakout sessions to attend, with subjects as diverse as Solvency II for non-life companies, with profits, Shariah insurance, IFRS and new product development. These gave a chance to use more corners of the impressive venue, and allowed attendees to select which subjects best suited their needs.
A brief additional presentation was squeezed in before lunch, with Philip Blond of leading think tank ResPublica. Largely attributed with developing “The Big Society”, Philip explained that this involved groups of citizens coming together to solve issues that government cannot solve. He went on to explore how mutuals had a real opportunity to play a role in this key aspect of government agenda.
Philip recognised that the move towards mutualisation of financial services had ground to a halt due to capital constraints, and suggested that mutuals need to re-think how to blend mutual ideals with private capital. This “blended economy” was already proving successful in the US.
The final formal element of the conference was a panel discussion on “The future of mutuality”. Peter Hunt CEO of Mutuo chaired the discussion, which included contributions from:
- Alan Newman, behavioural psychologist, who suggested that mutuals were not serving customers as well as they could, as they were constrained by attention given to Solvency II, the RDR and Treating Customers Fairly.
- Adrian Coles, Director General of the Building Societies Association, explored the growth in market share for financial mutuals, and suggested that effective engagement with customers is vital whilst the concentration of banking is increasing future risk of failure.
- John Reeve, CEO of Family Investments suggested that the government still needs to define what the Big Society means, and that mutuals should be researching what services they can provide in the future. An expanded role for mutuals is essential if they are to head off the risk to capital presented by FSA.
- Paul Davies, columnist for the Financial Times, more provocatively suggested that mutuals, particularly those involved in sharing of risk, “are done for”. This is due to the limited wriggle room for risk to capital, and because the concepts inherent in mutuality, such as rights and rewards, are too vague.
A lively Q&A ensued and the consensus was that the mutual sector is at risk and only urgent action now will enable it to enjoy the role in the Big Society envisaged by many.
Slides from the presentation are available to view either on the AFM website, or by contacting firstname.lastname@example.org .
Exhibition and sponsorship
Exhibition stands sold out very quickly, so the exhibition hall was full and provided a great opportunity for exhibitors to catch up with clients and to talk about new developments in the sector.
We are very grateful to all our exhibitors and sponsors- they not only provide funds that help us to run the conference at very low cost, but they also significantly add to the atmosphere and value of the conference. We hope to see you all again next year!
Networking and social report
Notwithstanding the very full agenda, the value of the AFM conference is just as much about giving people with a common interest the chance to catch up, to share experiences, to network and to have a good night out.
The highlight of the social aspect of the conference was the gala dinner. The Great Hall lent itself perfectly to the evening, and an enjoyable meal was matched by the post-dinner speaker, ex-MP and comedian Gyles Brandreth- who, having sat next to master of ceremonies for the evening and AFM Vice-Chair John Reeve for dinner, showed a remarkable knowledge of the sector and its characters, as well as a great warmth for mutuality.
A large number of delegates provided feedback after the conference- and this was overwhelmingly positive. 77% rated the conference overall as very good or excellent, with only 4% rating it fair/ poor. 94% of attendees felt that the conference had added to their personal development.
The details feedback is provided in the chart below.
There were particular positive comments about the panel session on the “Future of Mutuality”. There were a few negative/ constructive comments: a couple of people called for more questions from the floor, some of the presentations felt like sales pitches, and a number of people felt that the conference hotel was too far from the venue.
Our thanks to everyone that provided feedback; all comments will be taken into account in planning the 2011 conference.
Annual General Meeting
The AGM was held immediately after the end of the Conference. It was a short meeting, with no contentious issues to be discussed, but was well-attended and a good opportunity for members to hear more of the work of the Association.
The minutes of the AGM are attached to this report.
This was the first conference of the new trade body. The AFM Board was keen to assess the success of this event before making plans for the future. The Board sat immediately after the conference and concluded that the conference achieved its strategic objectives of bringing together our members and demonstrating the value of a strong and co-ordinated sector, and created a small financial surplus. As a result the Board agreed the conference should be an annual event.
Planning for next year is now underway. In the meantime, sincere thanks to everyone who attended or contributed to making the 2010 conference an outstanding success.
Minutes of the first Annual General Meeting of the Association of Financial Mutuals
At the Merchant Taylors’ Hall on 19 October 2010, commencing 2.30 pm
- The Chairman, Mike Yardley opened the first Annual General Meeting of the Association.
- Craig Errington and Mike Rogers were appointed as tellers.
- The review of the year had been moved to the morning session of the conference.
- Martin Shaw presented a brief review of AFM plans and budget. This indicated that AFM’s work and resources are focused around six key priorities:
The Board received a report each meeting on activity and results against each of these.
The AFM budget indicates that a surplus in the order of £40,000 was budgeted, and that savings in the back office costs through selecting new specialist outsourcers had made this achievable.
- John Reeve explained that the current Board was due to stand down in 2011, and that the Nominations Committee would formalise a process for any current Board members and other members who chose to stand for the future.
The constitution states:
'The Nominations Committee shall maintain and publish to members an up-to-date process for the selection of candidates to serve on the AFM Board. This must include the process for putting forward a candidate as well as the basis by which the Annual General Meeting is asked to approve the composition of an incoming Board.’
- The Chairman sought approval of the statutory report and accounts, which was approved unanimously on a show of hands.
- There being no other tabled business the meeting closed.