The International Cooperative and Mutual Insurance Federation (ICMIF) has learnt that UK member organization NFU Mutual is the UK’s most recommended home insurance provider, according to figures from Consumer Intelligence, which were published exclusively by Insurance Times earlier this week.
Other recent figures from Consumer Intelligence confirmed that NFU Mutual was also top of the customer satisfaction table for motor insurance. The result is that the mutual insurer can now call itself the most recommended insurer across the two biggest personal lines books in general insurance.
NFU Mutual’s net promoter score (NPS) has risen by a 21.8 percentage point climb to 39.3% from home insurance policyholders who renewed their policies between April 2014 and March 2015.
Consumer Intelligence chief executive Ian Hughes says that one of the factors driving NFU’s success was its history of focusing on customer outcomes and delivering the best for its policyholders.
He says: “We are looking at issues that focus on customers, so companies that fixate on customers are the ones that tend to get higher customer recommendation scores.
“Companies like NFU and John Lewis are well known for the fact that it is a really intrinsic part of their culture to be fixated on customers.
“The reason why the retailers appear [in the top 10] relates a lot to the fact that customers interact with them regularly.
“For an insurance company this is just a policy, for a customer it is piece of mind. If an insurance company wants to build customer satisfaction it has to start by thinking about why customers buy its insurance policies in the first place and the relationship customers want.
“That is even more the case in home insurance than other insurances, because of the emotion that is connected with a person’s home.”
Recently published research by ICMIF shows that, at a global level, mutual and cooperative insurers are outperforming the total insurance market. The mutual and cooperative sector reported record aggregate premium levels in 2013, collectively writing USD 1.26 trillion in insurance premiums. Since the onset of the financial crisis, mutual and cooperative insurers grew their premium income by 28% between 2007 and 2013, whilst the total insurance market only increased by 11% during the same period. As a result, the global market share of the mutual/cooperative sector grew from 23.8% in 2007 to 27.3% in 2013*.
The significant increase in mutual market share since the start of the global financial crisis highlights the strong benefits of the mutual and cooperative business model. It can be argued that the financial crisis led to a shift in consumers’ buying behaviour relating to insurance and other financial products, and that the growth of the mutual sector is a result of customers reacting against the perceived culture of greed propagated by joint-stock companies. The diminishing trust and disdain associated by many with shareholder-owned financial service institutions has led to many commentators observing a ‘flight to quality’ within the insurance industry, most notably in life and investment related products, with customers seeking to invest their insurance premiums in a ‘safe’ and ‘trusted’ place.
Shaun Tarbuck, ICMIF Chief Executive, suggests that greater levels of trust and customer satisfaction associated with mutual and cooperative insurers has given them a competitive advantage against shareholder-owned insurers. “Our analytical research says that the mutual and cooperative sector has been the fastest-growing part of the global insurance industry since 2007. We are, I feel, at the cutting edge of the insurance industry – and certainly the recent growth in market share of the sector suggests that the public is beginning to recognise this as well. When a cooperative/mutual insurer creates member value it, in turn, fosters competitive advantage and ultimately increases market share. All the statistics collated by ICMIF’s research team tell the same story: we’ve earned the right to call ourselves strong.”
*This data from ICMIF forms part of the Federation’s Global Mutual Market Share research, a market intelligence report based on an analysis of the premium income, assets and investments of 5,000 mutual and cooperative insurance companies from 77 countries around the world.
Information in this article was kindly shared by Matt Scott, Digital Insight Editor, Insurance Times
Image above right shows Lindsay Sinclair, CEO of NFU Mutual (pictured second from right) and local NFU Mutual agency
staff meet with a member at his flooded farm in 2014.