Market-leading performances by AFM members in 2011- again
Mutuals have on the whole continued to fare very well, despite the turbulent
economy and a tough insurance market.
Data collected from AFM members for the year to 31 December 2011 show that
premiums written grew during the year by a very impressive 15%. On a like-forlike basis, ie excluding new members, premiums rose 12.5%. During the year,
63% of AFM member premiums were in life and investments, 34% in general
insurance, with the remaining three per cent in health care.
Assets too were up, increasing by a healthy 5% in the year, and exceeding £90
billion for the first time. And a report from Money Management from August
2012 showed that, judged by Realistic Free Asset Ratios, eight of the strongest
life offices are mutual.
These levels of growth are all the more striking, given general trends in the
insurance market for lower sales: for example FSA reports new retail
investments sales down over 11% in 2011 (data on general insurance volumes
in 2011 is not yet available, but volumes appear to have been generally flat).
At the end of 2011, key statistics included the following (2010 figure in
brackets):
Total assets under management
£90.3 billion (£85.9 billion)
Gross premiums written
£9.7 billion (£8.4 billion)
Employees
16,224 (16,030)
Policies in force
21,175,000 (20,300,000)
Claims paid
£6.7 billion (£8.3 billion)
Amongst the 21 million policyholders in the sector, around 8.5 million are also
members (against 8.55 million in 2010).
This marks the fourth year of growth for the sector, as the charts below
demonstrate.
AFM member assets
(£bn)
100
90
80
70
60
50
2008
2009
2010
2011
Healthy increases in premium income within mutuals in the past few years are in
stark contrast to the UK insurance sector as a whole- whilst 2011 data is not yet
available, FSA data shows the life sector in particular has seen a rapid fall in
volume since 2007. This means of course that the mutual sector’s market share
has increased significantly over the last few years.
AFM member premiums
(£bn)
10
9
8
7
6
5
2008
2009
2010
2011
However it would be wrong to assume that the sector is unaffected by the
continuing recession and fall in consumer confidence: not all organisations
reported strong growth, and of course in 2011 a number of long-established
brands disappeared. But many people are beginning to appreciate the better
standards of service and potential for higher returns from mutuals, and this has
made mutuals increasingly attractive to consumers and their advisers.
The following tables reinforce the level of concentration in the sector, with the
largest five mutuals accounting for 83% of assets and 80% of premium income in
2011. Whilst we would expect that trend to continue, there are however some
less familiar names in the mutuals that have grown most rapidly over the last
three years.
Largest AFM Members at the end of 2011, by asset size
1
Royal London Group
£38.6 billion
2
NFU Mutual
£12.3 bn
3
LV=
£10.3 bn
4
Equitable Life
£8.7 bn
5
Wesleyan Assurance
£4.8 bn
6
MGM Advantage
£2.2 bn
7
Ecclesiastical
£1.8 bn
8
Reliance Mutual
£1.7 bn
9
Family Investment
£1.1 bn
10
B&CE Benefits
£0.9 bn
Largest AFM Members at the end of 2011, by premiums written
1
Royal London Group *
£2,861 million
2
LV=
£2,197 m
3
NFU Mutual
£1,384 m
4
Family Investment
£781 m
5
Ecclesiastical Insurance
£484 m
6
Wesleyan Assurance
£333 m
7
MGM Advantage
£320 m
8
Scottish Friendly
£130 m
9
Equitable Life
£117 m
10
Forester Life
£117 m
Most rapidly growing members over three years, by change in assets
2009-2011
1
Compass Friendly Society Limited
66%
2
Red Rose Friendly Society
43%
3
Healthy Investment
32%
4
Sheffield Mutual Friendly Society
25%
5
Druids Sheffield Friendly Society
25%
6
Oddfellows Manchester Unity
23%
7
Ecclesiastical
21%
8
Transport Friendly Society Limited
18%
9
MGM Advantage
16%
10
LV=
14%
Most rapidly growing members over three years, by premium
income increase 2009- 2011
1
Oddfellows Manchester Unity
2
Red Rose Friendly Society
3
Transport Friendly Society
4
Druids Sheffield Friendly Society
5
Family Investments
6
Kingston Unity Friendly Society
7
Engage Mutual
8
MGM Advantage
9
LV=
10
Healthy Investment
114%
91%
75%
51%
37%
32%
31%
29%
27%
26%
Further information on AFM member statistics is available on the AFM
website, with more information on 2011 data available soon:
http://www.financialmutuals.org/advantage/key-statistics