Latest Press Releases And Comments

Here we cover all the very latest news. If you have a specific enquiry or something you’d like to find out about, please get in touch. Contact Martin Shaw at AFM via email or call 0788 754 7195.

04 January 2013

AFM comments on 'Mutuality and with-profits funds: a way forward' 


AFM and its members very much welcome the approach taken by FSA in CP12/38, coming as it does after more than six years of active engagement with mutual insurers.  The consultation demonstrates some fresh thinking from the regulator on their approach to mutual insurers with a with-profits fund, and therefore reflects the wider trend in public policy to, as the government has said, 'foster diversity and promote mutuals'.  .

The consultation recognises that for some mutual insurers volumes of new with-profits business have been reducing, and that the rules create barriers to effectively developing alternative business plans.  Mutuals are currently at a competitive disadvantage to PLC insurers, because most or all of their assets are subject to conduct of business rules, and there are therefore constraints on the amount of capital available.  The FSA proposals envisage that mutual insurers can develop a supervisory-led solution to this, which might include, but is not limited to separating the various interests in the with-profits fund, in other words to create separate pots for with-profits policyholder funds, non-profit policyholder funds, and mutual members' (capital) funds.  Any solution would need to satisfy the FCA that the solution is fair to all policyholders, and satisfy the PRA that the mutual remains financially sound, and the consultation stresses that the regulators will take a proportionate approach which will not preclude smaller mutuals.

As the consultation acknowledges, mutual market share in insurance has fallen from over 50% 30 years ago to around 7% today.  The fresh approach from the FSA may have come a little late in the day, but should help to remove some of the motivations to demutualise, or for a with-profits mutual to have to wind up- as long as it has a relevant future business plan, and can demonstrate it remains wholly accountable to its members.

AFM will respond to the consultation by the deadline of 19 March, and we aim to be positive about the likelihood of these proposals providing a secure foundation for a stronger mutual sector, whilst looking for a little more explanation of some of the finer points in the paper.

22 October 2012

The Association of Financial Mutuals appoints new Chairman and vice-Chairman

The member organisations of the Association of Financial Mutuals (AFM) - the trade body that represents mutual insurers, friendly societies and other financial mutuals in the UK – have appointed a new Chairman and Vice-Chairman.

At its Annual General Meeting on 17 October 2012, AFM’s members approved the appointment of Mark Goodale, Chief Executive of Reliance Mutual as Chairman, and of Phil Loney, Group Chief Executive of Royal London as Vice-Chairman.

The appointments were made following the retirement of incumbent Chairman John Reeve.  Mr Reeve stands down as Chief Executive of Family Investments at the end of October, after more than thirty years service.

Mark Goodale was previously Vice-Chairman of the AFM and has been Chief Executive of Reliance Mutual since July 2006, where he has led the Society’s strategy to grow its membership through a mix of providing specialist products to customer niches and acquisitions of selected portfolios of life and pensions policies from other insurers, particularly fellow mutuals and friendly societies.

Mark Goodale, Chairman of the Association of Financial Mutuals commented:“I’m delighted to become the latest Chairman of AFM.  Over the last few years, the media spotlight has regularly focused on the failings of some of our largest financial PLCs and there is a growing consensus that big business needs to operate more transparently and responsibly to rebuild consumer trust. During this time, mutuals have quietly continued to work closely with their customers to provide a better experience of financial services.  This is an important time for financial mutuals that look after the needs of 20 million people and offer a real alternative to the PLCs. With the support of government and with appropriate regulation, the financial mutual sector can do so much to restore public confidence in our industry.”

Phil Loney was appointed to the Board of Royal London Group on 3 October 2011, coinciding with his appointment as Group Chief Executive of Royal London Group. He previously spent eight years at Lloyds Banking Group, most recently as Managing Director, Life, Pensions and Investments.

Commenting on his appointment, Phil said: "I am very pleased to have been appointed Vice-chair of AFM.  As a relative newcomer to the AFM Board, I have been impressed by the enthusiasm and single-mindedness with which AFM works for a successful mutual insurance sector.  AFM represents a diverse group of mutual insurers but I believe that there is a single unifying factor at work - the desire to deliver a better deal for members of mutuals.   I look forward to working with the new Chairman and the other members of the Board to influence the market environment to make this happen."  

02 July 2012

Government not doing enough to respond to bad bank behaviour, says Martin Shaw, Chief Executive of the Association of Financial Mutuals

For people to have trust in the financial services industry, they need assurances that the basic components of the system work.  The FSA’s record fine of Barclays today is yet another demonstration that banks continue to treat consumers with contempt and are focused solely on making a quick profit regardless of the ethics or legality.  The scandals over PPI, or failing IT systems look mild in comparison.

Independent research commissioned by the Association of Financial Mutuals earlier this year found that consumers trust financial mutual far more than plcs with their money. When asked to rank financial mutuals and financial plcs on a trust scale of 1-10, financial mutuals received a ‘Net Trust Score’ of +32%, compared to financial plcs, which registered -5%, clearly demonstrating that whilst a vast majority of people trust mutuals with their money, the same cannot be said for shareholder-owned companies, who people have lost confidence in as a result of the financial crisis.

The Government has already begun to take action to remove the worst aspects of the bonus culture, but it is not doing enough.  Until it ensures the system works fairly and properly, the market will remain open to abuse.  However, the root of the problem largely rests in successive governments standing by whilst markets became less competitive, less customer-orientated and more concentrated.  The answer must be to act decisively to make financial markets more diverse, and that means taking positive steps to grow an effective, mutual alternative to the big banks.

18 April 2012

Financial companies ‘Owned By You’, are trusted by you

New research shows people trust mutuals, but not plcs

People are far more likely to trust a financial mutual than any other type of financial services provider, including shareholder-owned high street banks according to new consumer research revealed by The Association of Financial Mutuals (AFM) today.  

When asked to rank financial mutuals and financial plcs on a trust scale of 1-10, financial mutuals received a ‘Net Trust Score’ of +32%, compared to financial plcs, which registered -5%, clearly demonstrating that whilst a vast majority of people trust mutuals with their money, the same cannot be said for shareholder-owned companies, who people lost confidence in during the financial crisis.

AFM is today launching a new consumer website called Owned By You ( encouraging people to take a more active role in organisations that they own and to provide clearer information about financial mutuals, explaining the fundamental differences with shareholder-owned organisations and the benefits to their customers that result.  The site is aimed at both the 20 million members who own a stake in mutuals in the UK, but also at consumers who have not necessarily understood that mutuals mean the organisation is owned by, and run for, the benefit of its customers. 

Talking ahead of the launch of Owned By You, Labour MP and Chair of the Business Select Committee, Adrian Bailey MP said:

“One of my criticisms of the [mutual] movement in the past, is that it has not shouted its difference from the rooftops even though it’s got a very good story to tell…The public do, increasingly, appreciate the difference between mutuals and the proprietary sector.”

He added, “This website will go some way to promoting the idea, getting greater understanding of it, and hopefully strengthening the sector.”

Jonathan Evans, Conservative MP and Co-Chair of the All Party Parliamentary Group on Building Societies and Financial Mutuals stated:“I think it is very important that there should be diversity in financial services… Those companies that are actually owned by their policyholders or their depositors, have shown for more than a hundred years that it is a very successful model.  That’s why I think the development and the retention of mutuals is so very important.”

Martin Shaw, Chief Executive of the Association of Financial Mutuals, commented:

“The financial crisis meant that many people lost confidence is large parts of the financial services industry, and that this is proving very slow to return.  The Prime Minister said recently that we need a better model for business, to get people more engaged- our research shows that we have a solution, in the mutual organisations which people so clearly trust.

“At a time where the public’s perceptions of financial services remain woefully low, we hope that the new website, Owned By You, will help people gain more of the knowledge and tools they need to become more engaged in the way organisations they own are run.  We expect that society as a whole is better when the mutual sector is stronger.”


Notes on Net Trust Score


Research conducted by Opinium Research on 28/ 29 January 2012, with a nationally representative sample of 2,010.

Respondees were asked to rate financial mutuals and financial plcs on a scale of 0 to 10, where 0 meant strongly distrust, and 10 meant strongly trust.

The average score for mutuals was 6.0, for plcs 4.6.  The breakdown of scores was:

%                                 Mutual                          plc

Distrust                         10                                 28

Neutral                          36                                 38

Trust                             42                                 23

Unsure                          12                                 11

The net trust score is derived from deducting the proportion that distrust away from those that trust.

Notes on Owned By You,

Owned By You is an information website for the members of mutual organisations.  It has been produced by the Association of Financial Mutuals, the trade body that represents financial mutuals in the UK.  It uses content generated by members as well as independently, to provide a rich source of information about the sector in a format that is accessible to consumers.

AFM retains its b2b website,, and continues to invest in children’s education through 4 to 7 year olds) and 7 to 11 year olds). 

Follow us on twitter: @ownedbyyou

For further information please contact:


Rimmi Shah/ Simon Alderson               

Lansons Communications

020 7294 3670 / 020 7294 3680


Martin Shaw is available for comment if required. 

22 February 2012

Losses from Lloyds and RBS demonstrate acute need to overhaul the bonus system, says Association of Financial Mutuals CEO, Martin Shaw

  • New research shows strong public support for stopping bonuses in loss-making organisations and publishing top executive pay
  • Stability of a financial organisation is the joint second most important factor for consumers when choosing where to save or invest

As Lloyds and RBS prepare to report combined losses of £4 billion this week, despite showing a willingness to pay six and seven figure bonuses, new research from the Association of Financial Mutuals reveals strong public support for curbing excessive and irresponsible remuneration and bonus payments.

Martin Shaw said, “It will come as a shock to many that organisations who fail to make a profit can justify paying their top executives vast bonuses. The Government must commit to looking very carefully and comprehensively at the bonus culture – not just within our private sector organisations – but in the public sector too, to ensure that they are used proportionately and as intended: a reward for exceptional performance.”

New research commissioned by the Association of Financial Mutuals shows strong public support for greater transparency of top executive remuneration in financial organisations, and a clear link between company performance and bonuses. 

Over half (51 per cent) of respondents supported either a complete ban on bonus payments unless the organisation was making a profit, or that details of top executives’ pay and bonuses must be made publicly available. Nearly one fifth (18 per cent) supported both of these measures being implemented.

Stability was also revealed as the joint second most important factor, on a par with access to a local branch, that consumers consider when choosing where to save and invest their money.

Shaw added, “This ongoing furore over bonuses in part publicly-owned or funded organisations – especially loss-making ones – shows that taxpayers demand a say in top people’s pay. This is exactly the kind of shareholder activism that will make companies more accountable to their owners.

“There is also a growing realisation from consumers and politicians that the capitalist business model has lost its moral compass and is in need of urgent repair, and that the Government should actively support the growth of other forms of business model – such as companies owned by their staff or customers.”

“There are two positives to take from recent events though”, Shaw noted. “Firstly, Lloyds claiming back some past bonus payments – if adopted more widely – could mark a step-change in remuneration policy for top executives, holding them to closer personal account for the business decisions they take, even in retrospect. This is a must going forwards.”

“Secondly, in opposition the Conservative Party committed to disclosing the number of employees in banks on high salaries. The Chancellor has failed to act on this in Government, but this research shows he has a clear mandate from the electorate to do so.” 

03 February 2012

Greater transparency and responsibility over executive remuneration demanded by the public, according to new research by AFM

New research commissioned by the Association of Financial Mutuals shows strong public support for greater transparency over top executive remuneration in financial organisations and a clear link between company performance and bonuses.

Over half (51 per cent) of respondents supported either a complete ban on bonus payments unless the organisation was making a profit, or that details of top executives’ pay and bonuses must be made publicly available. Nearly one fifth (18 per cent) supported both of these measures being implemented by financial organisations. 

To see full story, follow this link

16 January 2012

Commenting on  the Deputy Prime Minister’s Mansion House Speech this morning, Martin Shaw, Chief Executive of the Association of Financial Mutuals stated:

“I welcome much of the Deputy Prime Minister’s speech on responsible capitalism and would strongly emphasise the key role mutuality can play in achieving this.

“Stability, responsibility and accountability are the missing attributes that have led to the advent of what he and others have identified as “crony capitalism”. I would hasten to point out that they are also the principles by which members at the Association of Financial Mutuals operate. They are traits championed by the mutual business model across many sectors.

“While the Coalition Agreement commits to the promotion of the mutual business model, we have seen the focus of attention so far on the John Lewis-isation of public services. Mr Clegg has spoken of the need for shareholders to behave more like business owners – mutuality provides a very simple solution to this: mutuals are owned by you, the customer. I wholeheartedly support his views on the benefits of employee ownership but let us not overlook the integral benefits to consumers, the economy and society of a thriving customer-owned mutual sector.” 

16 December 2011


Commenting on the announcement that the Co-Op has been given preferred bidder status by Lloyds for the sale of their 632 branches, Martin Shaw, Chief Executive of the Association of Financial Mutuals, stated:

“I am delighted to hear that the Co-Op is the front runner to purchase the branches that Lloyds have been obliged to sell by the European Commission. The mutual business model has never been more relevant for financial services; after the disappointment over the failure to pursue the re-mutualisation of Northern Rock, this is a shot in the arm for the sector.

“The Government made a commitment to foster diversity in financial services through the promotion of mutuality and there has been little evidence of their commitment to this to date. However, this announcement by Lloyds puts the mutual business model in the spotlight as one that is stable, responsible and a perfectly viable alternative to shareholder organisations that don’t always have the interests of their customers at heart.”

13 December 2011

Association of Financial Mutuals welcomes a number of new members

We are pleased to announce that CUNA Mutual and the Veterinary Defence Society have become Full Members of AFM.

In addition, we are pleased to be joined by new Associate members: Frontier Investment Management, J.P. Morgan, Littlejohn LLP and Norton Rose.

This brings total membership of AFM to 56 full members and 32 Associate members.

29 November 2011

Martin Shaw, Chief Executive of the Association of Financial Mutuals, comments on the 2011 Autumn Statement:

"The Autumn statement sounded in many ways like an emergency budget- with a series of actions introduced to address an economic position that has clearly deteriorated markedly over the last few months.


"We welcome some of the strong language about fostering UK industry, and members of AFM are keen to explore with the Treasury how insurer funds might be made available to help support infrastructure projects and help for smaller firms. It is important that mutual insurers are represented in the Insurers’ Infrastructure Investment Forum that the Government is creating with the Association of British Insurers. This after all is the basis by which mutuals were first created in the eighteenth and nineteenth century.  It also reinforces ideas we’ve presented to the Chancellor over the last few years.


"Many AFM members are themselves small businesses, so some of the rate and tax reliefs announced will be positive for companies, as well as for their self-employed customers.  However, for a government with a stated commitment to “foster diversity and strengthen mutuals, there remains nothing in the government’s planning to remove some of the barriers to the future success of the mutual insurance sector.  And more broadly, with the statement providing a raft of new spending initiatives, the devil may yet be in the detail, as some of the fiscal balances needed are still to emerge."