The mutual and co-operative sector is calling on the next government to back business with purpose beyond profit.

30 November 2023

Trade bodies ABCUL, AFM, BSA and Co-operatives UK have come together to publish a joint prospectus ahead of the next General Election, outlining how co-operatives and mutuals can help the next government tackle the biggest challenges: economic stagnation, inequality and insecurity, and the climate emergency.

Mutual and co-operative businesses make a significant contribution to the UK economy, with combined annual revenues of £87.9 billion, equating to 3.5% of UK GDP.

By offering a competitive alternative to shareholder-owned businesses, they are essential for the UK to build an inclusive, growing and diverse economy. They also provide greater consumer choice while delivering ‘mutual value’ to their members and wider society.

However, their different legal and regulatory frameworks prevent mutuals from competing on a level playing field with their competitors.

The mutual and co-operative sector is therefore calling on the next Government to create a meaningful covenant between mutuals and co-operatives, Government and society, based on the purpose-driven business model that delivers tangible benefits to our communities and wider society.

The joint prospectus sets out the action needed by the next Government:

  • Create an environment that places mutuals and co-operatives at the heart of economic strategy, supporting the growth of the mutual sector
  • Deliver a legislative and regulatory framework that enables mutuals and co-operatives to meet the needs of the communities they serve and compete fairly with other businesses
  • Create and preserve capital to support new and growing mutuals and co-operatives

You can read the joint prospectus here: The Purpose of Mutual and Co-operative Business in Society

A series of parliamentary events will be held across the UK in the new year to engage, face-to-face, with politicians from all parties. The aim is to build understanding of the value mutual organisations bring to the economy, and to garner support for the actions required to maintain that mutual value.

– Ends –

For more information contact: Andrew Whyte, Chief Executive, AFM: [email protected] or 07703 107613

Wesleyan joins the Association of Financial Mutuals

August 2023

Wesleyan, the Birmingham-based financial services mutual is the latest member to join the Association of Financial Mutuals (AFM). The AFM is the trade body that represents mutual and not-for-profit insurers, friendly societies and other financial mutuals across the UK.

Wesleyan has been providing specialist financial advice and solutions for doctors, dentists and teachers for over 180 years and has more than £7 billion assets under management. It becomes the AFM’s 47th member.

Mario Mazzocchi, Wesleyan Group Chief Executive said: “Now more than ever, in these challenging economic times, it is important that the mutual sector remains focused on its members. At Wesleyan, we are incredibly proud of our mutuality and believe the model offers members financial confidence, diversity of choice and alternative options for investors.

“Mutuals play an important role in today’s society and we welcome the successful passage of the Co-operatives, Mutuals and Friendly Societies Bill through the House of Lords and the more recent news that the Law Commission will carry out a review of the Friendly Societies Act 1992. At last we are seeing a focus on modernising our sector, enabling Mutuals and Friendly Societies to continue to flourish and support important growth for the UK.

“We look forward to adding our voice to the fantastic work the AFM is already doing to raise the profile of mutuality across the UK.”

AFM Chair, Stuart Tragheim said: “I am delighted to welcome Wesleyan to AFM. Wesleyan’s profound commitment to mutuality, rooted in their proud history, will strengthen our collective voice and advocacy on behalf of the mutual sector.

“I look forward to working with Mario and the rest of his talented colleagues across Wesleyan as we work together to strengthen our sector, improving the services we offer our members and making the case for the distinctive contribution that mutuals make to the economy and society as a whole. A contribution which is all the more vital in these challenging times.”

AFM welcomes a key moment in much-needed reform of Friendly Societies legislation

20 June 2023

The Association of Financial Mutuals (AFM) welcomes the announcement that the Law Commission will carry out a review of Friendly Societies Act 1992 in coming months.

The AFM has been campaigning for years for a comprehensive reform of Friendly Societies legislation. The announcement of this review is an important first step in modernising the legal and regulatory framework for Friendly Societies, so that they can compete on more equal terms with other insurance companies, and continue to serve the best interests of their members and to deliver superior outcomes.

The Government committed to asking the Law Commission to review the Friendly Societies Act during Parliamentary debates about the Co-operatives, Mutuals and Friendly Societies Bill, a Private Members Bill introduced by Sir Mark Hendrick MP last year. The Bill has highlighted the strong commitment from parliamentarians across all parties for the mutual and cooperative sector, and was given a Third Reading and completed its progress through the House of Lords on Friday 16 June and is now awaiting Royal Assent.

Andrew Whyte, AFM Chief Executive, said:

“The Law Commission review of the Friendly Societies Act is long-overdue.  The world has changed beyond recognition since the Act was introduced more than 30 years ago, and this has contributed to a sharp decline in the number of active societies. Taken together with the successful passage of the Co-operatives, Mutuals and Friendly Societies Bill through the House of Lords, this represents a key moment in our long-standing campaign for reform. But it is only a start, and we look forward to working with the Law Commission to develop a modern, relevant and proportionate legal and regulatory framework which will enable Friendly Societies to continue to thrive and grow.”

– Ends –

For more information contact: Andrew Whyte, Chief Executive, AFM: [email protected] or 07703 107613

Notes to Editors.

  1. The Law Commission Review was announced by Andrew Griffith MP, Economic Secretary to the Treasury in a written Ministerial Statement on Monday 19 June: Written statements – Written questions, answers and statements – UK Parliament and by the Law Commission itself on Friday 16 June 2023: Law Commission invited to review legislation on co-operatives and friendly societies – Law Commission.
  2. For more details about the Co-operatives Mutuals and Friendly Societies Bill see the Parliament website: Co-operatives, Mutuals and Friendly Societies Bill – Parliamentary Bills – UK Parliament.

Mutual income protection providers paid out over £50 million in claims in 2022

April 2023

-Increases in the number of claims for aching joints, bones and muscles leads to higher claims payouts-

Members of the Association of Financial Mutuals (AFM) that offer income protection products paid out £52 million in claims in 2022, to over 9,000 customers.

This compares to £34 million in claims in 2021. Much of the increase reflects that LV= has since joined AFM and its results have expanded the value of claims paid:.  Looking at the figures on a like-for-like basis, the amount paid out in 2022 is around 3% higher, whilst the number of claims fell 2%.

The most common form of claim was musculoskeletal (33% of all claims).  Whilst these claims were also the most frequent in previous years, the rate of increase is significant, as demonstrated in the chart below.

In 2020, we speculated that the fall in musculoskeletal claims coincided with lockdown and the likelihood that people were spending less time travelling and at their desk; the rapid rise since indicates that this respite was temporary, and that changing lifestyles since the start of the pandemic, such as increased remote working and greater use of technology, have made us more vulnerable to problems with joints, bones and muscles.

Interestingly, the number of claims relating to mental health fell slightly, from 9% in 2021 to 8% in 2022.  This is despite the HSE reporting that more than half of workplace-related ill-health cases are caused by stress, anxiety and depression[1], which reinforces the need for effective support for employees.

The vast majority of claims last a relatively short time (two-thirds last less than a year), but one in seven claims run for over five years.  This illustrates the vital support that income protection can provide.  Whilst the number of people who need to claim is modest, the benefits to those that do can be immeasurable. Families that would otherwise be forced to rely solely on State support, can maintain their standard of living during a protracted illness.

The proportion of claims approved was just under 92%, which was a little lower than the previous year (94%), but which still emphasises the commitment of the sector to pay all genuine claims.  The main reasons for claims to be declined were those where key information was not disclosed at the point of application or claim (41%), and the claim had been made for an excluded condition or was outside the scope of the policy (39%).

Andrew Whyte, Chief Executive of AFM added:

“AFM members sold 50,000 new income protection policies in 2022.  This, and increasing amounts paid out emphasise the growing importance people attach to ensuring their income is secured if they can’t work due to injury or illness.  Whilst inflation and the cost of living remain high, having the capacity to pay the bills and look after the family finances has never been more important.  Mutual income protection providers are at the forefront of paying claims and committed to providing the best possible service to their members.”


John Lewis, and the perils of raising capital in a mutual

March 2023

Press reports in recent days that John Lewis is seeking external investment to fund its future strategy are yet another reminder of the challenges of being a mutually-owned organisation.

Mutuals, whether member-owned or employee-owned, still make up a significant part of the UK economy today. The best known, as well as John Lewis, are the Cooperative Group, Nationwide Building Society, and Royal London. Traditionally, mutuals like these have had to rely on retained profits to grow their capital base, as there are no external shareholders to call on to raise new funds. This may constrain their options to grow, and in turn this makes them vulnerable to competitor activity and to takeover.

Demutualisation has been the solution for many in the past, but the story of demutualised building societies and insurers in the past is a sorry one, with most businesses and their customers losing out. And this was the problem LV= recognised in 2021, which led it to an attempt to demutualise and to sell the business to private equity. That failed, because insufficient of its members supported the proposal, and LV= is now cutting its cloth, and rejuvenating itself as a member-focused organisation.

The challenge for John Lewis is made more acute by the woes of the High Street, where many of the department stores that once dominated have been washed away. John Lewis’ strategy, combining high street and online, with groceries and other business ventures, calls for a scale of capital support that it appears is not supportable internally.

Access to capital has been a long-held challenge for mutual businesses. Legislation was brought forward in 2015, for mutual insurers and friendly societies to create new forms of shareholding without diluting the ownership model, but the ‘Mutual Deferred Shares Act’ has been thwarted by dogmatic resistance in HMRC.

The perils for John Lewis are that on the one hand, a lack of new capital might ultimately undermine the business, and on the other, that new investors will seek to overtly influence the business model. Either of those outcomes will be bad for everyone that cherishes John Lewis and Waitrose, as important, purpose-led businesses.

John Lewis needs a proper capital solution that allows it to raise funds, and properly reward investors, without having to compromise its business model. The Government should not stand idly by and let another bastion of mutuality slip away.


LV= joins the Association of Financial Mutuals

March 2023

Leading UK life and pensions mutual insurer LV= is the latest member of the Association of Financial Mutuals (AFM). The AFM is the trade body that represents mutual and not-for-profit insurers, friendly societies and other financial mutuals across the UK.

At its most recent meeting, the AFM Board unanimously agreed that LV= should become the AFM’s 45th member.

David Hynam, CEO at LV=, said:

“Mutual organisations play an essential part in delivering financial confidence across all parts of society, striving to deliver the best financial outcomes for members. Mutuals provide diversity of choice and make our life and pensions market more resilient.

“It is essential that mutuals compete on a level playing field and that policymakers understand the necessity to update the rules and regulations that govern the sector so mutuals can thrive.

“As LV= approaches its 180th year, I am delighted that we are adding our voice to the fantastic work the AFM and its members are already doing.”

Stuart Tragheim, Chair of the AFM Board and CEO of Holloway Friendly, said:

“The AFM Board was delighted to welcome LV= to the AFM and approve its application.

“LV= and AFM have been in dialogue for a number of months and the AFM Board has been impressed by the LV= leadership’s commitment to maintaining strong mutual credentials. They are also enthusiastic about engaging with the rest of the mutual sector, and their commitment will make a real contribution to our work making the case for mutuality and promoting corporate diversity in the best interests of mutual members across the UK.”

UK mutual and cooperative insurers significantly outperformed their peers in the total UK insurance market in 2021

November, 2022

UK mutual and cooperative insurers significantly outperformed their counterparts in the total UK insurance market in 2021, according to the International Cooperative and Mutual Insurance Federation’s latest UK Market InSights, a joint report by ICMIF and the Association of Financial Mutuals (AFM).

The sector saw annual growth of 17.1% in FY 2021, compared to total UK insurance market growth of 8.9%, a figure which represents the eighth year of positive growth for the sector in the last decade.

Key findings on the UK mutual insurance sector:

  • UK mutuals wrote a combined GBP 22.8 billion in insurance premiums in 2021.
  • GBP 14.2 billion in life business (2020: GBP 11.1 billion), & GBP 8.6 billion in non-life business (2020: GBP 8.4 billion).
  • 7.9% share held of the total UK insurance market (2020: 7.3%, 2007: 4.4%).
  • GBP 202.1 billion assets held.

Ben Telfer, ICMIF Senior Vice-President, Membership, who first presented these findings at the AFM Conference in October 2022, said:

“The UK market has displayed great resilience in rebounding from the challenges of 2020 thanks to the diligent, innovative work of mutual and cooperative insurance companies in the UK sector today.

The fact that 33.8 million policyholders are served by UK mutual and cooperative insurers today- a record high- is a testament to mutualism and the trust held between the sector and its member-policyholders.”

Martin Shaw, Chief Executive, Association of Financial Mutuals said:

“This very valuable report reinforces the continued- and now growing- presence of mutuals in the UK insurance marketplace.

More important perhaps than the bottom-line growth figures and market share though is that friendly societies and mutual insurers in the UK serve over 33 million policyholders. Many of these policies are held by people who are poorly served by mainstream insurers, or have limited financial resources, or are vulnerable, and our sector takes great pride in being open to everybody.”

The UK Market Insights 2022 report also includes further life and non-life analyses, past premium totals and market shares, and a breakdown of assets/ investments held by the sector since 2007.

AFM appoints its next Chief Executive

Andrew Whyte

The Association of Financial Mutuals (AFM) is delighted to announce the appointment of Andrew Whyte as their new Chief Executive.  Andrew has extensive knowledge of the financial services industry and regulation, having served until recently as the Director of Communications at the Financial Conduct Authority.  During his career, he has also worked across a number of different government departments and was Head of Corporate and Public Relations at the BBC for seven years.

Andrew will take up his new position from 1st January 2023.  Once he has taken over full responsibility for running AFM, it is expected that the outgoing Chief Executive Martin Shaw will remain in a part-time, policy-focused role to support him during a particularly busy period for the UK mutual sector.

Martin has the led the AFM, the trade body for mutual insurers, friendly societies and not-for-profit healthcare providers in the UK and Ireland since it was formed in 2010. He informed the AFM Board of his plan to step down by April 2023 earlier this year.

The Chair of AFM, Stuart Tragheim (CEO of Holloway Friendly), stated:

“The AFM Board undertook an extensive recruitment process and was delighted with the calibre of candidates.  Andrew stood out from the rest, through both his very relevant experience and his natural capacity to lead the trade association in an imaginative and empathetic way.

The Board look forward to working with Andrew on some of the key opportunities and challenges facing the sector currently, including the development of new legislation, and our calls for balanced regulation.  We also plan to build on the recent positive work of AFM, to promote awareness of the benefits of mutuality, and to equip our people with the skills and knowledge to do their job effectively.”

Andrew Whyte, incoming Chief Executive commented:

“I am honoured to be appointed as Chief Executive of the AFM. The ethos of the mutual movement has never been more important than now – putting members’ interests above all else, giving consumers genuine choice and helping to promote a competitive and vibrant financial services industry. AFM has a vital role to play as an energetic and articulate advocate for the sector and I am incredibly excited by the opportunities ahead.

But I know I have big shoes to fill. Martin Shaw has done a remarkable job leading the AFM, establishing it as the authoritative voice of the mutual sector at the same time as delivering a high-quality professional development and training programme. I am delighted that Martin will continue on with the AFM and I am looking forward to working with him and the Board in taking the sector, and AFM, forward.”

Commons votes to support legislation for mutuals and friendly societies

The Second Reading of the Cooperatives, Mutuals and Friendly Societies Bill took place in the House of Commons this morning.  MPs provided cross-party support for the customer-owned sector, and voted unanimously in favour of the Bill progressing to its next stage.
The Bill focuses on the provision of an ‘asset lock’ for cooperatives and mutuals, and is in many respects a reaction to the attempt by private equity in 2021 to seize control of one of our largest mutual insurers in the UK, LV=.  The Bill is intended to preserve capital in a mutual insurer, friendly society or cooperative for the future benefits of its members and to thwart a hostile approach.
The scope of the Bill was much-diminished in the days before the Second Reading, and the Minister also announced that the Government was intending to undertake a review of key legislation relating to the sector, including engagement with the Law Commission to help the Government finalise its approach.
Martin Shaw, Chief Executive of the Association of Financial Mutuals stated:
“The positive support for mutuals from all corners of the House of Commons today was tremendous to see.  The recognition that a strong mutual and cooperative sector is good for consumers and society was very welcome, and provided a great reward for the hard work by AFM and its members in recent months, to argue the case for reform.  This Bill takes that reform work forward, but there is a lot more to do, and it is vital that the Government commits to the broader review of legislation.  After all, an asset lock might protect a successful mutual from unwelcome bids, but will not in itself ensure it continues to access the capital to grow and to be successful.”

AFM and the mutual sector share with the entire nation our deep sadness at the death of Queen Elizabeth II. Our thanks for Her Majesty’s unstinting service, and our best wishes go to the Royal Family.

AFM received record level of press coverage in 2021/22

In the last financial year, working with our PR agency Smoking Gun, AFM received 171 pieces of press coverage.

For more, view the infographic: AFM April – June 2022 Q2 summary and wrap up[98].

AFM launches search for its next CEO

In April 2023 Martin Shaw, CEO of AFM since its launch in 2010, intends to step down as CEO.  He will continue working in a part-time capacity, and we have launched a search for his replacement with the help of Hanover Search.

If you would like to find out more, contact [email protected], or view the following video:

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