NFU Mutual

NFU Mutual is a UK insurance composite. As a mutual, its policyholder members own the business, and the executives and directors are accountable to them. The full name of the organisation is National Farmers' Union Mutual Insurance Society Limited.

The business is authorised and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, with complaints oversight available via the Financial Ombudsman Service.

History
In 1910, the Midlands Farmers' Mutual Insurance Society Ltd was formed by seven farmers in Stratford-upon-Avon, Warwickshire. The company provided insurance and the scheme was confined to members of recognised farmers' unions. Premiums were charged at established insurance rates with a discount of 15% to union members.

John William Lowe was elected the first chair, serving 1910-18. James Robertson Black was the first secretary, and his farmhouse was the first office. In 1912, he became the first managing director. He served for 42 years, serving as vice-chair 1946-52. The first accounts (1911) show income of £311 and profit of £16.

In 1912, the farmers' union in Lincolnshire approached the businesses for advice about forming a mutual insurance company, and were advised to join existing enterprise. In 1919, the society became the official insurer of the National Farmers' Union (itself established in 1908) and changed its name to the one it bears now. The Society was managed by 16 directors, eight appointed by the NFU and eight appointed by the Society. Membership was open to NFU members only and the discount on premiums increased from 15% to 20%. Within a year, premium income went from £9,790 to around £70,000. Ralph Chisholm joined the staff during this period; he would become the first CEO. The First World War enabled the NFU Mutual to gain a 50 per cent increase in income.

In 1920, offices were established in Stratford-upon-Avon. An early director was Sir Basil Brooke; he went on to be Prime Minister of Northern Ireland and revived the Ulster Volunteer Force as a paramilitary organisation.

In 1922, NFU Mutual became the official insurer of the NFU of Scotland.

In 1928, NFU Mutual set up a life assurance business. In its first year, that enterprise wrote more than £100,000 of sums assured. It also set up its final-salary pension scheme for employees. By 1930, income from premiums had risen to nearly £316,000 and the Mutual had eight branches.

In 1925, NFU Mutual set up a separate company to write non-farming business for the general public. Originally called The Farmers' Commercial, its name became Avon Insurance in 1931.

In the 1930s the business ran a film unit. People attending his film shows would be educated on current affairs and the benefits of membership. In the words of one agent it was 'the best bit of advertising we ever did'.

By 1940/41, over 100,000 farmers held policies with NFU Mutual and premium income reached £1 million with assets at £2million.

In the 1960s, NFU Mutual's assets reached £50m, but there was a significant outbreak of foot and mouth disease on UK farms in 1967. The insurer had first offered insurance against this disease in 1949 but the devastation was so severe that in November 1967 it decided to stop taking new business. Support from reinsurers enabled the society to offer renewals to businesses who already had cover.

The current head offices at Tiddington were constructed in 1984 building, designed by David Lloyd Jones for RMJM. It was one of the first to be designed around environmental sustainability.

In 1985, around 70% of NFU members were customers of NFU Mutual. Storms in 1987 produced over 13,000 claims and cost the Mutual £30 million. In 1990 37,000 claims were received for storm damage which cost £58m.

In July 1998 the Board put before the members proposals to change the Articles to give the Mutual freedom to insure anyone, irrespective of profession or occupation. Seeking to reassure the alarmed core farming customers that the change would not have an adverse impact, a product called Mutual Advantage was set up, restricted to NFU Members, which it was claimed provided extra discounts and cover for farming customers.

In the late 1990s, the demutualisation of NFU Mutual was explored by director John Murray who initially approached five venture capitalists in the hope of launching a bid. Substantial windfalls for members were anticipated.

Commenting to the House of Commons Treasury Select Committee on the possibility of demutualisation, Andrew Young, the then managing director said: "In our view, members of a mutual should... decide how the business is run, and if they are not satisfied, they should get rid of the Board and the management rather than demutualise."

In 2002, Andrew Young retired, succeeded by Ian Geden. He became group chief executive in 2005 when that post was created. During his term, the general insurance premium income grew from £603 million to £944 million.

In 2007, a series of floods brought more than 13,000 claims representing a liability close to £100 million.

In 2008, Lindsay Sinclair became Chief Executive (the first such appointment from outside NFU Mutual). He was Group Executive for 12 years, retiring in March 2021. In 2015, NFU Mutual closed two call centres.

In March 2021, Nick Turner became chief executive.

The drought of 2022 saw a huge growth in farm and combine harvester fires which cost the Mutual around £100 million in claims.

NFU Mutual has also announced that more than 20,000 customers made claims worth a total of £170 million for Storm Arwen in 2021 and Storms Dudley, Eunice and Franklin in 2022.

That year the Annual report stated "A Principal Risk and Uncertainty is that NFU Mutual's customer base changes substantially beyond expectations."

Following the invasion of Ukraine in 2022, NFU Mutual revealed it would divest from its Russian holdings.

NFU Mutual reported receiving over 5,000 complaints (representing 3 complaints per 1,000 policies) from 1 July 2022 – 31 December 2022.

In 2022, NFU Mutual won several industry fraud awards. In the same year, NFU Mutual's Claims Validation Technical Manager David Phillips became chair of the General Insurance Fraud Committee of the ABI.

NFU Mutual was Which? 'Insurance Brand of the Year' for 2022'. In 2023, NFU Mutual was the only Which? recommended provider of home insurance.

The business apologised in 2023 to a third party couple whose garden and swimming pool had been destroyed by a member of NFU Mutual and their buffalo herd.

In January 2024 Ali Capper, a member of the business's Remuneration Committee gave evidence to the Environment Food and Rural Affairs Committee about issues of power abuse and exploitation of farmers in the agri-food supply chain.

Financial performance
The business reported profits of £164million for 2023. At the end of 2023, its total funds under management were £20.2 billion. The business currently underwrites around £2.222 billion in annual general insurance premiums for UK policyholders.

In evidence given to Parliament, NFU Mutual has stated that it has between 65% and 75% of the UK farm insurance market;

Solvency
In 2022, NFU's Mutual solvency ratio improved by 14% to 218%. The NFU Mutual has asked the Prudential Regulation Authority to reduce the scale of reserves required for it under Solvency II Regulations. This is still in place for NFU Mutual.

Accountancy
In 2022, the Financial Reporting Council asked about declarations regarding its exposure to Business Interruption claims because of requirements of section 21 ‘Provisions and Contingencies’ of FRS 102s. The FRC stated NFU Mutual 'provided a satisfactory response'.

Membership
The management and conduct of the business is done under the authority of the members/policyholders who are senior to the directors and executives and may dismiss them.

There are around 900,000 members of the NFU Mutual. As NFU Mutual has no shareholders, a proportion of its profits, if any, are returned to policyholder members in the form of an adjustment on quoted premiums of renewing customers. A discount of between 8.5% and 13.5% (2022/2023) is provided which the business brands "Mutual Bonus". Under NFU Mutual's articles of association, each policy generates a distinct right to speak and vote at the Annual General Meeting (AGM), scrutinise the accounts, and hold the management to account, as well as an ownership right in the business. The AGM is generally held at the British Motor Museum at Gaydon, Warwickshire and is open to all policyholder members.

Senior leadership team
Board members "are responsible for the overall direction of the Company and setting the Company's values and standards". As of Spring 2023, it consisted of the following people:


 * Jim McLaren MBE (chair), a farmer from Scotland
 * Nick Turner (CEO), formally held offices at AXA
 * Richard Morley (Finance Director), help possitons at Lloyds Banking Group where he was finance director of the bank’s international financial services business at the time of the 2008 financial crisis
 * Rachel Kelsall (Customer Services Director), a former head of compliance
 * Nick Watson (Sales & Agency Director) joined NFU Mutual from AXA

Non-executive directors are:


 * John Deane sometime CEO of Chesnara who has served as a board member of Atom Bank, Royal London Group, Old Mutual, and Century Life;
 * Ali Capper a director of the Oxford Farming Conference,a Nuffield scholar and an advertising operative
 * Jon Bailie Senior Independent Director formally held office at AXA
 * David Roper also the Senior Independent Director of Atom Bank and is also Chair of the National Youth Choirs of Great Britain
 * David Smith currently Chair of Altitude Plc
 * Alan Fairhead held offices in Zurich Insurance Group
 * Elizabeth Buchanan, CVO formally a secretary to Charles III when Prince of Wales

The NFUM's current Group Head of Legal and Company Secretary is Jim Creechan.

Beyond this the executive team has these additional people: Gina Fusco (Strategy & Marketing Director), Trisha Jones (HR Director). NFU Mutual has announced the imminent replacement of this directors – Bev Mitchell will take up a role as Marketing and Digital Director and Kenny Graves will be HR Director.

Gender pay gap
In the 2021 report, there was a gender pay gap of 24.5% based on hourly wage (mean). The bonus gap is 50.9% (mean). The 2023 Gender pay gap report sais "Much of NFU Mutual’s Gender Pay Gap can be attributed to the structure of the workforce."

NFU Mutual was written to by the Equalities Minister in 2018 about its non-engagement with the Women in Finance Charter and signed it in 2018.

Climate change
In 2022, NFU Mutual announced a carbon reduction strategy relating to its own operations. Targets include a 25% reduction in the business's own emissions by 2025 and a 50% reduction by 2030. To support this, NFU Mutual said it aims to maintain 100% renewable electricity purchase for its occupied premises. For its investments, the insurer is targeting a 50% emissions reduction in its equity and corporate bond portfolio by 2030.

In 2020, Ethical Consumer criticised NFU Mutual for "just talking about the climate impact of their offices" rather than the "far more significant impact of their investments". NFU Mutual responded saying: "We avoid areas we consider harmful such as predatory lenders, certain munitions, and climate-unfriendly companies with no plans to help decarbonisation."

Services and products
NFU Mutual offers personal and business as well as motor private and commercial motor insurance. They specialise in agricultural insurance.

NFU Mutual sell life insurance products including term assurance, critical illness, and income protection through AIG. The business also offers various investment and pension products, including ISAs and With-Profit funds, and sells financial advice and inheritance tax planning.

Relationship with farming unions
NFU Mutual is the official insurer of the main farming unions of the UK, and has a long-running affiliation with them. Each year the insurer makes significant financial contributions to the UK farming unions, donating around £7 million to them in 2021.

The insurer's associations with each union began as follows: National Farmers' Union of England and Wales (1919); NFU Scotland (1922); Ulster Farmers' Union (1930); Manx NFU (1947); and Scottish Crofting Federation (1986).

Agencies
NFU Mutual sells policies predominantly through a network of agents. Agents were traditionally Group Secretaries of the NFU. The Union, as employer, paid them a salary and the Mutual paid them commission. At the end of 2018, NFU Mutual had over 3,800 employees, and 654 agents working out of 310 offices.

Property dealing and development
In 2021, NFU Mutual bought a unit near Milnrow for £27 million, and also committed to spending £100 million on six sheds near Clowes. Also in 2021, NFU Mutual's plans to invest in a warehouse in Witney attracted over 190 objections. NFU Mutual responded saying the warehouses would create 150 jobs that will benefit the local economy and will add much-needed high-quality space to the area. In April 2022 NFU Mutual's management allocated in excess of a further £20 million of members' funds to this speculative investment with its commercial partner Tungsten.

In March 2022, plans were announced to build a speculative £34 million shed in Staffordshire. Work has since began on the shed. In April 2022, a shed was traded with Valor for £50 million.

In July 2022, NFU Mutual sold eight warehouses to American-based investment firm Barings LLC for £234 million and the negotiations were described as "contentious" when the deal completed in 2023.

In October 2022, along with partners Apache, NFUM obtained a loan of £70 million from Deutsche Bank to finance a £150 million build-to-rent development in Liverpool. A 325 rental-home unit neighbourhood in Liverpool was funded with NFUM capital and loans and opened in late 2022. It is reported to be the UK's largest build to rent project.

In May 2023, it was revealed that the business was to sell another £90 million worth of real estate assets.

NFU Mutual has recently liquidated retail assets on London: 24 Old Bond Street was sold for £141 million; 3/5 Bond Street was sold for £151 million.

2024 saw the business spend £20 million on another office building.

Subsidiaries
The business lists the following active subsidiaries:


 * N.F.U. Mutual Unit Managers Limited: (No. 1837277). Registered in England. Registered Office: Tiddington Road, Stratford upon Avon, Warwickshire CV37 7BJ. Authorised corporate director of The NFU Mutual OEIC.
 * The NFU Mutual OEIC: (No. IC000220) An investment company with variable capital incorporated in England. Authorised by the Financial Conduct Authority. Financial Services Register number 407816.
 * The NFU Mutual Portfolio Funds OEIC: (No. IC000745) An investment company with variable capital incorporated in England. Authorised by the Financial Conduct Authority. Financial Services Register number 496718.
 * NFU Mutual Select Investments Limited: (No. 8049488) Authorised by the Financial Conduct Authority. Financial Services Register number 582519
 * Risk Management Services: NFU Mutual Risk Management Services Ltd. is a health and safety company set up in 1997. NFU members receive a discount on some Risk Management Services through Union Advantage.

Islands Insurance
NFU Mutual acquired the Islands Insurance Group in 1987, providing access to NFU Mutual products for customers in the Channel Islands.

Avon Insurance
Avon Insurance was established in 1925 to provide insurance to non-farming customers. The establishment of this enterprise was opposed by the NFU hierarchy and the NFU Mutual directors were required to agree that they would "consult on such matters in future". Business increased in the 1970s at 25–30% each year, and Avon opened an underwriting room near Lloyd's insurance market in 1977. In 1975, Avon became one of the first companies to introduce index-linking of sums insured to protect customers against inflation. Avon closed to new business in 2013.

Other insurance operations
In 1929, NFUM bought another farming insurance company, Northern Farmers. Between 1948 and 1974, NFUM had operations alongside unions in Central and East Africa, including what was then known as Rhodesia and Kenya. Operations in Kenya ceased in 1964 and Rhodesia in 1974.



NFU Mutual Charitable Trust
NFU Mutual set up a Charitable Trust in 1998 to deal with need concerned with 'agriculture, rural development and insurance.' In 2022, it pledged to donate £1m to 'national and regional charities' as part of NFU Mutual's overall donation of £3.25 million to charity. In 2022, it donated £30,000 to help the NFU support and expand its education projects. In the past 24 years the independent charity has distributed funds averaging around £250,000 per year. In 2022 the NFUM Charitable Trust pledged £150,000 to Disasters Emergency Committee's Ukraine Appeal.

Farm Safety Foundation
In 2014, NFUM set up the Farm Safety Foundation, an independent charity to help young farmers challenge their behaviours and change their attitude to farm safety. The foundation aims to have zero avoidable deaths on farms and runs an annual Mind Your Head campaign concerning mental health issues.

Agency Giving Fund
In 2020, NFU Mutual set up a fund for its agency offices to use in order to distribute money to charities in their local communities. A total of £1 million was distributed in the first year. In 2021, the Agency Giving Fund distributed £2 million to charities and in 2022 it distributed £1.92 million.

Research and reports
Each year, NFU Mutual issues a Rural Crime report based on its claims data. In 2023, the report showed rural crime cost the UK an estimated £49.5 million in 2022, an increase of £9 million from the year before. The 2022 edition of the report indicated that rural crime cost the countryside £40.5 million in 2021, down from £44.7 million in 2020.

In October 2022, the business released research indicating their customers had "put a hold on their [investment] plans while ... assessing uncertainty overshadowing" them.

Since 2016, NFU Mutual has produced an annual responsible business report.

Notable people
During World War II, Arthur Scarf, an employee was awarded a posthumous Victoria Cross.

A former First World War pilot, George Lindsay, was NFU Mutual General Manager between 1944 and 1955.



A former chairman of NFUM is Lord Curry of Kirkharle.

Harold Woolley, Baron Woolley was a director retiring in the 1980s.

Noteworthy court cases
In Smith (Leah) v National Farmers Union Mutual Insurance Society Limited and Robinsons Services Limited [2019] NIQB 37, the company denied liability for an accident sustained during an employee's attendance at work, but the court found against the company.

In 2017, Preston-based law firm Barber & Co were ordered to pay costs to NFU Mutual after the firm represented a claimant in an injury case without instruction. Barber & Co lost the case and HHJ Peter Hughes referred the case onto the Solicitors Regulation Authority, Lancashire Police and the Crown Prosecution Service for further action. The law firm claimed the case was the result of "two non-qualified fee earners creating false documentation."

In 2016, NFU Mutual denied liability for a £128,000 bill for damage to a cottage from a burst water pipe. NFU Mutual lost the case and was ordered by Mr Justice Holgate to pay £100,000 in legal costs on top of the damage.

In 2010, NFU Mutual sought compensation from HSBC towards fire damage to a property on the basis of double insurance but the judge agreed with HSBC and NFU Mutual was liable for the full extent of the claim.

Frauds
In 2011, employee Gordon Murray was jailed for his fraud on the members of £400,000.

In 2018, Iain Wishlade also an NFU employee, was jailed for submitting a fraudulent payment request from his business LDK Ltd to NFU Mutual.

Business interruption and COVID-19


NFU Mutual sold policies which were the subject of examination in the Financial Conduct Authority test case on business interruption payments during COVID. Following the first instance decision in the High Court and the appeal in the UK Supreme Court in this case the business published a statement saying judgment of the court meant it had no liability to meet claims for COVID-19 related business interruption.

In 2022 (following the handing down of the UK Supreme Court decision in the FCA test case), plans to bring proceedings in a group action against NFU Mutual with Penningtons Manches Cooper LLP acting as solicitors were announced. In 2024 this case came to court. NFU Mutual is defending another group action filed in the court.

In a Chartered Institute of Insurance podcast at the beginning of the pandemic in May 2020, Nick Turner (at the time sales and agency director, and subsequently CEO) stated that the company would "have to work to renew trust with certain customers", but that this would be "challenging". Turner accepted that policyholders not receiving business interruption payments could impact their welfare and mental health in this same podcast, a point reiterated in commentary by chairman Jim McLaren in another podcast, who said: "And you mentioned mental health and it's a crucial area and one that's often overlooked other than by those who are suffering from real mental health challenges. And again, the Mutual recognises that."

In February 2023, it was reported in the Insurance Post that "complaints over missing cover for Covid-related booking cancellations upheld."

COVID-19 grants
In November 2020, following criticism and campaigning the company's conduct in deducting COVID-19 support grants from its payments triggered by COVID-19 were called into question in debate in the House of Commons with John Glen MP stating: "I am aware that NFU Mutual has continued to make such deductions. As stated in my letter, these grants are intended to provide emergency support to businesses at this time of crisis, and it is the Government's firm expectation that they are not to be deducted from business interruption insurance claims."

Director pay
In 2011, the issue of excessive pay has received negative attention, with the Insurance Times quoting an observer as saying: "Only two words come to mind – and they are 'snout' and 'trough'.

In 2013, a director of NFU Mutual, David Anderson, was scrutinised for his role as chief executive of the troubled Co-operative Bank during its financial collapse which had a capital short fall of £1.5bn. NFU Mutual's board left Anderson in place, going further and issuing a statement saying they benefited from his kind of advice and 'had no plans to review his appointment'.

In 2023 the CEO, Nick Turner took total remuneration of £1.7million.