Engage Mutual delivers ‘robust performance’

OUTGOING Engage Mutual chief executive Andrew Haigh was paid more than £600,000 in 2012 as the friendly society posted a “robust performance in challenging times”.

Mr Haigh, who stepped down in January after more than 10 years in the role, received a basic salary of £204,000.

His income was boosted by a £58,000 annual performance award, a £59,000 termination payment and a further £285,000 paid as part of his contract and representing a 12 month notice period.

Acting chief executive Peter Burrows, who has stepped up from finance director, said: “The organisation owes huge thanks to our former chief executive, Andrew Haigh. 

“In his 10 years as chief executive, Andrew increased  the scale and range of the business, launched the Engage Mutual brand, and more than doubled our customer base to its current level of around half a million customers. He leaves us in a strong capital position and with a clear vision of our future.”

Engage helps families provide for their financial needs with life insurance, savings and health cash plan products.

Revealing its performance for the year ended December 31, Harrogate-based Engage said it had grown its new business sales by 14% year on year, had recorded industry leading customer satisfaction scores, and maintained a highly secure capital position.

New business annual premium income rose to £5.3m, which included sales of its over 50s life insurance product growing by 50% year on year to £3.2m. Sales in its fledgling health business grew 36% to £600,000.

An anticipated fall in contributions received into child trust fund accounts followed the Government’s closure of the scheme, Engage said, together with a decision to refer customers with maturing pension plans to a specialist third party provider in order to help secure them the best possible retirement annuity, saw overall premium income fall by 10% to £57.4m.

Claims paid out to customers across all products totalled £86.5m, comprising £36.2m of life insurance benefits, £5.2m of health benefits and £45.1m of maturing savings and investments. 

The fall from last year, when claims totalled £101.8m, was largely due to a reduction in the number of savings and investment products that matured in the year.

Mr Burrows said the mutual was not driven “by a need to maximise profitability” as it was owned by its customers.

Engage said any surpluses generated were transferred to its fund for future appropriations (FFA), to be used for the future benefit of members. The FFA ended the year at £83.9m, broadly in line with 2011’s figure of £84.5m.

Mr Burrows said: “Our aim is to have a positive impact on our customers’ lives through simple, good value products underpinned by excellent customer service. 

“The foundations for this are a strong capital position and continued investment in the future of the business.

“Our 2012 results demonstrate a robust performance in challenging times. We have enhanced our core life insurance product and grown our sales whilst controlling our costs.

“Our capital position remains enviably strong, to the extent that we continue to use some of that capital strength to improve returns to savers through a combination of enhanced policy values and a reduction in contractual charges across a range of product types. 

“In parallel, we are continuing to invest in our future, most notably in our health business.”

Total assets grew by 1% over the year, to £931m. Customer numbers, at 499,000, were marginally down on the prior year.