NFU Mutual


NFU Mutual
The National Farmers Union Mutual Insurance Society Limited
Type Mutual
Industry Financial Services
Headquarters Tiddington, Stratford-upon-Avon, England
Key people Lindsay Sinclair (Chief Executive)
Products Life, General, Pensions and Investments
Employees 3000
Website http://www.nfumutual.co.uk

The National Farmers Union Mutual Insurance Society Limited, trading as NFU Mutual, is a UK registered mutual insurance composite. It underwrites more than £1 billion (2008) in annual premium in life and general insurance lines for rural communities within the UK. NFU Mutual is based in Stratford-upon-Avon Warwickshire. In contrast to insurance companies that are owned by their shareholders, NFU Mutual is owned by its policyholders.

Unlike most other UK insurers, NFU Mutual still uses a direct sales force. It has over 300 offices and over 5,000 staff and agents spread across the UK. This network enjoys a close relationship with the National Farmers Union (NFU). In 1909 the NFU Mutual was formed to offer insurance as an inducement for farmers to join the NFU. Many of the agents double as local union representatives. Many agents are self employed and all are tied to NFU Mutual products. This direct sales force plays a major part in publicity campaigns and provide a valuable local service.

NFU Mutual has won many awards for the design of its products and customer service. Most of the mutual's general insurance products have a Defaqto 5-star rating (January 2009). Defaqto ratings are based on a detailed analysis of a product's features and benefits. In July 2008 NFU Mutual received the British Insurer Awards General Insurer of the Year and a Customer Service Prize reflecting the care shown to customers following the 2007 floods.

From 1980 the NFU Mutual has accepted risks from outside of the farming community. NFU Mutual Direct was set up in 1996 to provide telephone and internet call centre services. The affiliate, Avon Insurance plc, provides personal protection and personal injury insurance.

NFU Mutual is currently engaged in a program to open new branches where NFU Mutual has never ventured before including Battle, in East Sussex; Southport, Merseyside; and Oxford city centre. A further ten are planned for 2010.

Contents

Management

There are currently 13 people on the board of directors. Key individuals are:

Chief Executive Lindsay Sinclair
Chairman of Board of Directors Lord Curry of Kirkharle
Finance Director Kim Arif

Lindsay Sinclair, the current CEO, joined NFU Mutual from ING Direct in autumn 2007. A New Zealander, aged 52, he is the first external CEO to be appointed at NFU Mutual. Ian Geden, his predecessor, was at NFU Mutual for more than 40 years.

NFU Mutual has strong financial solvency. It has assets of more than £10 billion and a Standard & Poor's credit rating of 'AA' (as of February 2005). NFU Mutual has a very high retention rate. Each year some 95% of policyholders renew. This reflects excellent customer service, a responsive branch network and a policy rebate incentive. Underwriting is profitable. In 2008 the general insurance book paid out £86 for every £100 premium received. This reflects skilled underwriting with a limited appetite for risk. Acquisition costs are high, reflecting the costs and commissions inherent in maintaining the branch network. Net wrtten premium for general insurance grew by over 5% between 2007 and 2008.

History

NFU Mutual was formed in 1910 by 7 local farmers as the Midlands Farmers Mutual Insurance Society Ltd., with working capital of just £190. It was formed to provide an inducement for farmers to join the NFU, which had been formed 2 years earlier. The provision of cheap insurance cover for NFU members contributed to the early growth of the NFU and NFU Mutual. Life insurance cover was introduced during the 1920s.

Although originally providing insurance only for members of the National Farmers Union, the mutual diversified outside of the farming industry during the 1980s. Over half of the policies by number now originate outside of the farming community.

NFU Mutual currently only trades withn the UK, Channel Islands and Isle of Man. From 1948 to 1966 it offered insurance in Rhodesia (now Zambia and Zimbabwe), Kenya and Tanganyika. In 1954 the NFU Mutual orchestrated the building of the new skyscraper, Farmer's Mutual House, in Harare.

Famous policyholders include David Lloyd George, Aneurin Bevan and Anthony Eden.

The mutual celebrates its 100th anniversary in 2010 and has planned a number of events to commemorate the occasion. On the 4th of January 2010 the mutual unveiled an internal DVD featuring senior management performing a cover version of the Peter Kay version of the Tony Christie song Is This the Way to Amarillo. This publicised a company wide talent competition: "NFU Mutual's Got Talent" copying the format of Britain's Got Talent. Also announced was a new book on the history of the mutual and a dinner for all members of staff.

Mutual bonus

As the NFU Mutual does not have shareholders, a large proportion of its profits are returned to customers in the form of a discount off the premiums of renewing customers. The discount ranges from 6% - 10% depending on the number of years that the policyholder has been using the mutual.

As part of the 100th anniversary, NFU Mutual intended to double the bonus for one year only.

Awards

Some of the awards and recognitions won by NFU Mutual include:

British Insurance Awards

July 2008 - Winner - General Insurer of the Year

July 2008 - Winner - Customer Care Award

July 2004 - Finalist - General insurer of the year

July 2004 - Finalist - Life insurer of the year

July 2003 - Winner - General insurer of the year

July 2002 - Winner - Customer care award

July 2000 - Finalist - Claims initiative of the year

July 1998 - Winner - Training initiative of the year

July 1997 - Winner - Risk management and technology initiative of the year

July 1997 - Winner - Life insurer of the year

Standard and Poor's Fund Awards

2006 - 1st - UK Individual Pension Funds over 10 years (Specialist group category)

2005 - 1st - UK Individual Pension Funds over 5 years (Smaller groups category)

2005 - 2nd - UK Individual Pension Funds over 10 years (Smaller groups category)

2004 - 1st - UK Insurance Funds over 5 years (Smaller groups category)

2004 - 1st - UK Insurance Funds over 10 years (Smaller groups category)

2004 - 1st - NFU Mutual Property Fund over 1 year (Pension Property Fund)

2004 - 1st - UK Individual Pension Funds over 5 years (Smaller groups category)

2004 - 2nd - UK Individual Pension Funds over 1 year (Smaller groups category)

2004 - 2nd - UK Individual Pension Funds over 10 years (Smaller groups category)

Auto Express Awards

2006 to 2010 - Best Car Insurance Provider

See also

National Farmers Union (England and Wales)

National Farmers Union of Scotland

External links

References

  • Victor Head; A Triumph of Hope, The Story of the National Farmers Union Mutual Insurance Society Limited; The National Farmers Union; 1985;



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