Harrogate based Engage Mutual, which provides life insurance, health and savings products to half a million customers, reports a fall in total new business sales and premiums for the year to date, but is upbeat that it achieved growth in life insurance and health, areas it sees as key to its strategic future.
In what remains both a tough and competitive market for the financial services industry, Engage Mutual is pleased by this performance, which is underpinned by the significant capital strength of the organisation.
premiums and claims
New business sales of £2.7m and total premiums of £28.6m are down on the prior year (half year 2012: £2.9m and £29.8m respectively).
New business sales continue to be dominated by over 50s life insurance, which increased by 7% year on year to £1.8m. Health sales continue to increase, up 14% year on year to £0.4m. As expected, with profits sales roughly halved, to £0.3m.
The decline in total premiums is in line with sector performance and driven by historical savings products, most notably unit-linked savings where premiums reduced by £1.1m to £3.5m. In contrast, the mutual achieved year on year growth in its key strategic products, with over 50s life insurance premiums increasing by 2% to £12.4m and health premiums increasing by 5% to £3.7m.
Commenting on sales and premiums, chief executive Peter Burrows said:
Our overall performance is in line with our expectations. Importantly, as we begin to refocus our business, we are continuing to see growth in our core strategic products.
£20.5m was paid out in life insurance and health claims (half year 2012: £22.7m) and £21.7m in savings and investment plan payouts (half year 2012: £27.1m).
capital
A diverse and prudently managed balance sheet ensured capital strength remained in excess of three times the required regulatory level. Total assets were stable at £937m (full year 2012: £931m).
A strongly capitalised business enables the mutual to continue to maximise benefits to customers, through a combination of competitive pricing, improved product benefits, and excellent customer service.
Commenting on the strong capital position, Peter Burrows said:
It’s our customers’ money, and the continued strength of their business means that as we put together our future plans, we can begin to act more ambitiously and make additional wider benefits available to customers. We will be road-testing our ideas in customer forums during October, following which I expect to be able to announce some exciting plans.
customer commitment
Engage Mutual has a history of excellent customer service, as evidenced in the most recent LAMRA survey1, where the organisation was rated as one of the top insurers for customer satisfaction, beating a range of mutual and plc industry competitors. In addition, its regular internal customer satisfaction survey, carried out twice a year, showed increased customer satisfaction in the first half of 2013.
Customers of both with profits funds continue to benefit from enhanced payouts, as the excess capital in those funds is progressively distributed to members. Typical enhancement rates to payouts in the first half of 2013 remain between 9% and 12.5%.
staff investment
Peter concluded:
We are proud of our reputation as an outstanding employer. This is recognised by our own people, 85% of whom would recommend Engage Mutual as a great place to work, and also by the independent Investors in People organisation.
Having been presented with the Investors in People Gold award in 2012, we were delighted to be awarded Champion status in July of this year, an accolade shared by only 10 other organisations in Yorkshire & Humberside.
The total number of staff employed is stable at 211.
