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.

26 February 2016

AFM's comments on the possible impact on mutual insurers of a decision by the UK to leave the European Union:

“Mutual insurers in the UK grew rapidly in the industrial revolution to serve local communities and trades, and they continue to work as part of those communities today.  Almost all the members of mutuals live in the UK, and mutuals employ all their staff here, pay their taxes here, and invest their assets predominantly in companies, government gilts and property in the UK.  Regardless of the result in the June referendum, with a focus solely on serving UK consumers, mutual insurers are unlikely to change a business model that has enabled them to grow more rapidly in recent years than the British insurance industry as a whole.  AFM research shows people trust mutuals more than PLCs, so during any uncertainty in the aftermath of the referendum mutuals could see a greater surge in business activity.

"If there is a decision to leave the EU, the most apparent impact on most mutuals will be the effect on the wider economy; for example how it affects the investment climate, interest rates and general prosperity.  Regulation is another key issue: in recent years the majority of insurance regulation has emanated from Europe, particularly via Solvency 2, and this has coincided with a time of closer scrutiny and much higher compliance costs.  Much of the UK rulebook will need to be rewritten, though as the UK regulators have actively embraced European rules, and as issues such as consumer protection and effective stewardship are now universally accepted, it is unclear that the tone of regulation would change significantly.

“More generally, the nature of mutuality is about people coming together to create shared solutions to common problems, and we expect to continue working with and learning from the experiences of other mutuals, both in the UK and abroad, whatever happens."

08 July 2015

Mike Rogers, CEO of LV= is next chairman of the Association of Financial Mutuals

AFM adopts good corporate governance, by appointing its board of directors on an annual basis.  At its meeting on 8 July, the outgoing AFM Board approved the appointment of the incoming Board.   As Mark Goodale, CEO of Reliance Mutual had served the maximum term of three years as chair that is permitted by our constitution, he duly stood down and the Board appointed Mike Rogers, Group Chief Executive of LV= as his successor.

On his appointment, Mike Rogers said:  “As Chief Executive of one of the UK’s largest mutuals I am pleased to be able to take an active role in how we can best shape our industry to ensure we are well placed for the future. I believe that our mutual status gives us the ability to truly act in our members' and customers' best interests. The mutual model is not an old-fashioned one, in fact it is very modern and relevant to today’s economic environment and key to the success of the overall financial services sector. I look forward to being able to use my knowledge and skills to support the work of the AFM in the chairman role.”

27 March 2015

The Mutuals' Deferred Shares Act received royal assent in the House of Lords yesterday evening.

This was only possible because of the dedicated support from Lord Naseby and Jonathan Evans MP, as well as the commitment of the Treasury to ensure the Bill progressed swiftly enough through the parliamentary process.

AFM met with Treasury earlier this month to explore how to maintain momentum: before mutual insurers can begin to create new share capital there is a need for secondary legislation and regulatory approval.  Treasury has agreed to convene a working group with a range of interested parties, so that by the time the next Treasury Minister is appointed, there is a clear picture of how the shares will operate.

The range of discussions will include ensuring the shares count as regulatory capital, enabling retail consumers to buy the shares, determine how small as well as larger mutuals might take advantage of the shares, how the new capital opportunities available to the sector can contribute to a stronger mutual market more generally.

Commenting today, LV= chairman Mark Austen said: “We hope this marks a turning point in the legislative and regulatory attitude towards these ownership models to ensure their further development as an important and diverse part of the financial services industry.”

Royal Assent was granted during the prorogation process, marking the end of the parliamentary term.  During the same session, the Deregulation Act was given Royal Assent, which includes the legislation necessary to permit the transfer, from 6 April 2015, of Child Trust Fund accounts to Junior ISAs.

15 April 2015

Obtaining additional ISA allowances following the death of your spouse or civil partner 

Since 3 December 2014, where a person holding an ISA dies and that person was married or in a civil partnership, the surviving spouse/civil partner is entitled to an extra ISA allowance equal to the value of the ISA(s) held by their spouse/civil partner (even where the spouse/civil partner does not actually inherit the ISA). This is referred to as the Additional Permitted Subscription (APS) allowance. 

The attached leaflet  is available for use by all members and can be saved, printed or copied as required.

06 March 2015

Mutuals' Deferred Shares Bill completes third and final reading in the House of Commons

The Mutuals’ Deferred Shares Bill is an important milestone for the mutual insurers: it is the first piece of legislation dedicated to the sector since 1995.  Back then, mutuals accounted for over half the UK insurance industry; today the mutual insurance industry is one of the smallest in Europe, so this legislation cannot come too soon. 

Hence we are very grateful that the Private Members’ Bill enjoyed swifter than usual progress, both in the House of Lords, where it originated under the wise guidance of Lord Naseby, and since December where Jonathan Evans MP took it forward in the Commons.  They are two long-term supporters of mutuals, and are very familiar with the difficulties of raising capital in member-owned organisations, so we are very appreciative of their hard work in taking forward the vision of a new form of mutual share.  We also fully appreciate the cross-party support the Bill benefited from, as well as strong Treasury support for the Bill, which have given it the best chance possible of completing its passage before the end of the parliamentary term.

The effect of the Bill will be to allow mutual insurers and friendly societies to raise capital via a new form of mutual deferred share.  This matters because at present mutuals can only increase their capital slowly and by retaining profits.  This has stifled the growth of the sector, and prevented them from competing effectively with PLCs even when, during the financial crisis, there was renewed demand for products from mutuals who are seen as trustworthy providers working in the best interest of their customers.  These shares will enable mutuals to develop new products, to achieve economies of scale, and widen mutual ownership.  They provide a critical alternative to the widescale demutualisation that has blighted the sector. This will help ensure that in any future financial crisis, there is a lower risk of discontinuity of supply for consumers.

Holders of the shares will be a member of the society, though irrespective of their holding will only have one vote.  Regulation will set out in future how mutual shares might be issued, but we would hope that they would be available to existing customers of mutual organisations.  As many mutuals are small organisations, we might also see groups of mutuals working together to issue shares.

Speaking in the report stage of the Bill in the Commons today, Shadow Chief Secretary to the Treasury, Chris Leslie MP highlighted the work of the AFM, the BSA and Mutuo, on raising the need for action on capital in mutuals, and to safeguard ownership and integrity of mutual organisations.  The Economic Secretary to the Treasury, Andrea Leadsom MP highlighted the importance of the Bill and the value of cross party support.  She indicated the sector had demonstrated a clear need and demand for this Bill.  Tony Baldry MP (Conservative) highlighted the dramatic effect that demutualisation had had, using AFM data on with-profits investments, to highlight the importance of retaining a strong mutual sector.

The Bill moved onto its third reading, during which Jonathan Evans MP highlighted the role of the sector over hundreds of years in supporting local communities.  He summarised his own commitment to navigating the Bill through the Commons by saying: “If there is any better way to draw an end to my service in this house, it is I think in doing something which ensures the mutual principle that my grandfather contributed to, is carried forward by this measure.”  (Mr Evans’ grandfather was an active member of the Tredegar Medical Aid Society, that Aneurin Bevan adopted as the inspiration for the NHS.  Mr Evans is standing down as an MP at the general election.)

The Economic Secretary paid tribute to both Mr Evans and Lord Naseby, and confirmed the government’s support for the Bill.   Treasury will consult with the PRA and FCA as soon as the Bill receives Royal Assent, to ensure the procedures are right, and will work this through as quickly as possible.  In the Economic Secretary’s opinion “it’s a short Bill but one that provides a huge opportunity for the mutual sector”.  The Bill was passed with unanimous support.

This is further good news for the mutual insurance sector, in a week that saw the launch of the first new retail mutual for 20 years when The Military Mutual opened for new business.

15 December 2014


New research partnership launched to investigate the strategic application of mutual values

The financial mutuals sector makes a vital contribution to the UK financial services industry. Research has shown that corporate diversity, a key factor in the health of the financial services industry, has declined. This is a matter for concern, particularly when financial services must respond to calls for a new culture, a revived concern for the customer and the delivery of fairly priced services which meet everyday needs. To promote a sustainable and diverse sector of financial and banking mutuals, it is crucial to examine key factors for its success, which might include a more equitable operating environment, better ways of working and to encourage the emergence of new financial mutuals.

It is in this context that The Building Societies Association (BSA), the Association of Financial Mutuals (AFM), and the Centre for Mutual and Employee-owned Business at Kellogg College, University of Oxford have announced a research partnership to investigate the strategic application of the values and principles of mutuality, and the contribution these can make to fostering the sector’s growth. The project will examine potential strategic drivers, such as leadership, culture and inter-organisational collaboration. The study will also examine the contribution that mutuality can make to create a compelling vision for the broader financial services sector, based upon improving people’s lives.

The aim of this project is to find ways to help financial mutuals gain greater market share and to contribute to the creation of a renewed vision for the financial services sector, grounded in restored trust and collaboration for mutual benefit.

The research will be managed by Dr Ruth Yeoman, Research Fellow at the Centre for Mutual and Employee-owned Business. The output will be a set of practical recommendations to the sector which will also contribute to policy making. It is envisaged that the research will begin with an initial six-month project leading to a longer term research programme with Oxford and other academic partners.

Professor Jonathan Michie, Director of the Centre for Mutual and Employee-owned Business said: “The UK economy has long suffered from a lack of corporate diversity. This was exacerbated by demutualisation. We have paid the price for being dominated by ‘too big to fail’ PLC banks. It is important – and urgent – to promote a more corporately diverse financial services sector, and for this we need a renaissance of mutuality.”

Martin Shaw, Chief Executive of the Association of Financial Mutuals (AFM) said: “There are many factors contributing to the changing shape of financial services provision in the UK, from technology to demographics to regulation and consumer buying habits.  A profound change in the last 30 years has been the tumbling level of corporate diversity which has reduced choice for consumers and stagnated innovation.  This new project will help to better understand how we might witness a renaissance in the mutual sector, and with it a more effective market for financial services.”

Robin Fieth, Chief Executive of the Building Societies Association (BSA) said: “The financial services market is well sighted on diversity of product but not on diversity of provider.  This is not a nice to have, it’s integral to a properly functioning and sustainable competitive landscape, and adds to the stability of financial markets.  Mortgage lending has recovered well since the crisis, led by the building society sector with its strong base of retail deposits to draw on.  This is in stark contrast to SME lending which is so heavily dependent on corporate banks.  This project will help us to draw out what comes next in creating that compelling vision for financial mutuals as a core part of the financial services sector in the 21st century.”

For more, go to:



26 November 2014


Culture and diversity in financial services

Earlier this month the Association of Financial Mutuals and the Building Societies Association launched the ‘Manifesto for Financial Mutuals’, to highlight to the political parties ahead of next year’s general election, how a more effective regime for financial mutuals would help consumers to get a fairer deal from the financial services industry.  Our proposals largely support existing government policy to restore trust in the industry, and to ‘promote diversity and support mutuals’.

In the few days since, a host of new reports has further strengthened these messages:

• The Social Markets Foundation on Monday launched a report on “Good culture: does the model matter in financial services?”: which found that most people believe financial companies put the interests of shareholders ahead of customers.  Their report sees a need to improve corporate diversity in financial services, as a means of protecting and supporting consumers, and that establishing the right culture is key to this.  Speaking at the launch event, the Economic Secretary indicated that people are “sick and tired of the scandals in financial services”, and explained the extensive work underway to address failings in corporate culture, including work to promote new sources of finance including via mutuals.  In turn, Mark Austen, Chairman of LV=, who sponsored the report, emphasised how their values deliver a good culture and how this in turn has stimulated their recent success.

• Also on Monday, the Building Societies Association issued an updated corporate diversity index for financial services, which showed a decline in diversity in the mortgage and savings markets in 2013.  Commenting on the report, the Economic Secretary stated that  “Corporate diversity is vitally important in financial services… to help customers get a better deal”.

• Another think tank, New City Agenda has today launched a report on the culture of retail banking in the UK, citing that British banks have since 2000 paid £38 billion in fines relating to their retail businesses, and since 2008 have received over 20 million customer complaints.  Policy intervention since has focused on structural changes, whilst cultural change has been left largely to industry to address.  The report found that aggressive sales culture was particularly prevalent amongst demutualised building societies, whilst in contrast the majority of organisations offering the best service in banking were mutuals.

• Today again the Prudential Regulatory Authority has issued a consultationsetting out its plans for a new ‘Senior Insurance Managers Regime’, to ensure leaders of insurers behave with integrity, honesty and skill- or suffer the consequences directly. This is complemented by a consultation by the Financial Conduct Authority on changes to its Approved Persons Regime.

• Earlier this month AFM released an updated version of the Annotated Corporate Governance Code for Mutual Insurers, with clear messages about the importance of the ‘tone from the top’, and the continuing need for Boards to lead the right culture in their organisations.

So it seems that there is a healthy debate about how culture and diversity fit at present.  That isn't to pretend that the culture in mutuals is right for all organisations, or even that culture is right in all mutuals, but as the Manifesto document emphasises, a diverse market for financial services is more likely to produce good outcomes for consumers.

If you have a view on the issue, let me know; our Twitter account is @ownedbyyou.


17 November 2014

AFM issues an updated version of the UK Corporate Governance Code for Mutual Insurers

Following amendments to its Code by the Financial Reporting Council, AFM has issued an amended version of its annotated Code.  All AFM members agree to comply with the principles of the Code, and report to AFM annually on all aspects of their compliance.  A copy of the revised Code can be downloaded here.

13 November 2014

A Manifesto for Financial Mutuals

The  Association of Financial Mutuals (AFM) and the Building Societies Association (BSA) have today launched a four pronged manifesto to help ensure consumers get a fair deal from financial services. The campaign groups representing building societies and mutual insurers across the country have called for action from Government and regulators ahead of next year’s General Election to fix the regulatory and legal imbalance that could stifle the mutual sector.

‘A Manifesto for Financial Mutuals’, aims to level the playing field between shareholder controlled plcs and mutually owned providers. It calls for:

• A fair deal for consumers
• A level playing field for financial mutuals
• A rational approach by regulators to capital
• A more coordinated approach to promoting mutuals, creating a stronger savings culture and tackling the housing crisis

Robin Fieth, Chief Executive of the BSA commented:

“There is a widespread consensus that a diverse financial sector benefits consumers and the economy alike. Therefore, it is a bitter irony that in the effort to address poor behaviour by some plcs and prevent another financial crisis, the resulting legislative and regulatory framework threatens to undermine rather than support corporate diversity.

“Ratcheting up regulation across the board is leading to a matrix of rigid rules that disproportionately affects mutuals. Instead, the differences inherent in the mutual structure should be considered side by side with other types of financial services businesses. Today we are setting out a plan to redress the balance and strengthen the mutual sector.”

Martin Shaw, Chief Executive of the AFM added:

“Consumers are being left with little choice but to go back to the very firms that caused the last recession in the first place. Far from fostering diversity and ensuring the financial sector is more resilient, the present regulatory landscape is tilted towards a one size fits all model.

“It should be a national scandal that not a single new mutual has been set up since the last decade of the last century. Politicians need to translate their aspirations for greater diversity into concrete actions to help the financial mutuals sector to compete on level terms, and to deliver a fairer marketplace for consumers.”

A fully copy of the Manifesto is available to download here