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.
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:
Modernising legislation for mutual insurers and friendly societies
16 June, 2022
In the wake of the (failed) demutualisation vote by LV= and with the help of the APPG for Mutuals, AFM has pressed for a range of legislative changes that would give mutual insurers and friendly societies the capacity to compete on equal terms with their non-mutual competitors, and to remove some of the past incentives for demutualisation.
On 15 June, the House of Commons had a First Reading of a Private Members Bill (The Co-operatives, Mutuals and Friendly SocietiesBill) which seeks to deliver some important changes to the legislation affecting the mutual sector.
Sponsored by Sir Mark Hendrick MP, with the support of AFM and Cooperatives UK, the Bill will cover a range of provisions for the mutual sector (along with others for cooperatives):
to update the Friendly Societies Act 1992, for which our starting point is the extensive submission we made to Treasury last year (copy available on request);
to address the problem relating to the tax treatment of any mutual insurer or friendly society that wishes to issue Mutual Deferred Shares; and
to permit the capital surplus of mutuals and friendly societies to be non-distributable (ie to seek to change the articles/ constitution to remove the possibility of the inherited estate being distributed in the event of a demutualisation).
Martin Shaw, AFM’s CEO, comments:
“Mutuals and Cooperatives diligently serve many millions in the UK, including many of the most hard-pressed in our population. Yet they do this most of the time with one hand tied behind their back, forced to operate within outmoded legislation. This important Bill will help mutual insurers, friendly societies and cooperatives compete on a more even playing field.
We are very grateful to Sir Mark Hendrick for bringing forward this Bill, and expect that as a result mutuals will be able to operate more effectively, and even more people will be able to benefit from being part of a customer-owned organisation, which only focuses on their best interests.”
The Second Reading of the Bill is planned to be on Friday 28 October (this is the first point at which a detailed case for changes to the law is made and debated in parliament).
Registration opens for the AFM Conference and AGM 2022
Set in the glorious, honey-hued surroundings of the Cotswolds,this year’s Conference takes place on 10-11 October and will focus on ‘The Mutual Ecosystem’. We’ll be exploring opportunities members have to work together to achieve better outcomes, and how we all influence and are affected by the environment around us.
Once again the conference offers the chance to network with friends old and new; debate current and future issues for the sector; and contribute to AFM’s planning. For more, or to register as a delegate or exhibitor, follow THIS LINK to our dedicated conference website.
As more UK workers live with long-term illness, income protection from a mutual provider has never been more relevant
6 April, 2022
Members of the Association of Financial Mutuals (AFM) that offer income protection products paid out 94.1% of claims received in 2021, up from 93.9% the previous year.
In total, AFM providers paid out around £34 million in claims to 10,300 policyholders in 2021 (including nearly 8,200 new claimants). Read on
LV’s move to go it alone is bold
11 February, 2022
Right after the members of LV= rejected the proposed sale of the business to the US private equity firm Bain, Royal London reaffirmed its interest in talking about a merger. That now seems to have fallen through, but before I look at the latest developments, a quick reminder of how we got here. Read on
Collaboration opportunities for Financial Mutuals
Whitecap Consulting, in partnership with the Association of Financial Mutuals (AFM), recently published a report analysing the strategic landscape for financial mutual organisations in the UK. The Whitecap team is summarising the key findings in a series of blogs.
In this article, Julian Wells and Chloe Thompson, of Whitecap Consulting, examine the extent to which collaboration can be seen across organisations within the AFM membership and discuss some of the associated challenges. They also highlight examples of collaborative relationships across the membership and identifies potential areas of opportunity for collaboration in the future, including cross-sector collaboration with other mutual organisations, posing three key questions to the CEOs. Read more
