Acquisition speculation grows as Engage sees customers increase
The Yorkshire Post understands that the Harrogate-based friendly
society could announce that it has bought a rival within weeks.
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Hide AdAndrew Haigh, the mutual's chief executive, said yesterday: "Growing the group through merger or acquisition is very much part of the strategy. It's something we have been working on.
"At the moment, there isn't anything to announce but we continue to have exploratory discussions as opportunities arise."
There has been speculation for months that Engage has been considering an acquisition after delivering a robust performance, although Mr Haigh has stressed that he did not "want to be painted as an aggressive player in this space".
In recent years, Engage, which used to be known as the Homeowners Friendly Society, has merged with the UK Civil Service Benefit Society.
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Hide AdIt has also bought health plan business Premier Health Benefits.
Engage's results for 2009, which are released today, show that the fund for future appropriations – which is the equivalent of a friendly society's profit performance – increased by 1.2m to 31.8m.
Group assets under management rose by 5 per cent to 624m, while total customer numbers increased by 2.4 per cent to 438,000.
Mr Haigh said: "Our approach for the year was to take a very cautious view and take a very tight control on costs.
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Hide Ad"We also wanted to keep in place things that would allow the business to grow." Over the year, staff numbers fell from 163 to 150. Mr Haigh stressed that most of the cuts came about through voluntary redundancies.
The annual report and accounts show that Mr Haigh's total remuneration, including salary, bonus and pension contributions, was 313,000 last year, an increase on the 296,000 recorded in 2008.
Mr Haigh added: "Total expenses for the business were reduced by 40 per cent; that's quite a dramatic change.
"Equities rose quite well during 2009, so we benefited from that too."
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Hide AdMr Haigh said he planned to grow the health cash plan operation, following the acquisition of Premier Health Benefits in 2008.
Over the year, more than 47m was paid to customers in claims and maturities.
More than 70 per cent of new customers made contact using the internet or telephone.
A partnership with Yorkshire Bank and Clydesdale Bank to market over 50s life insurance continued last year, with the launch of Vision, a tax exempt savings plan.
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Hide AdThis plan added "significant numbers of new customers" over the year.
Mr Haigh added: "The current environment is one where we could see a further kickback into recession.
"We are keen to see stability as soon as we can. Whatever happens with Government, it's clear there are going to be significant cutbacks in public spending.
"That will inevitably have an effect on the consumer. We're keeping a very cautious eye on how things develop.
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Hide Ad"We're adopting a very similar approach to that which we adopted last year.
"People are concerned about financial security and financial stability.
"The financial environment we have been through over the last few years has brought many challenges.
"It has made people think about the type of organisation they want to deal with.
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Hide Ad"A mutual does offer some unique benefits. The basic concept is that the organisation exists for the benefit of its members."
Engage has confirmed that it will continue to sponsor rugby league's Super League until 2011.
In March, Mr Haigh said that Engage would be talking to Super League about the future of the sponsorship agreement "towards the end of this year, or early next year".
A mutual role
In 2005, Engage Mutual Assurance was launched as a trading name of Homeowners Friendly Society and its wholly owned subsidiary Engage Mutual Funds.
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Hide AdIt is a leading provider of over 50s life insurance, child trust funds and tax exempt savings plans. It offers products direct to consumers, or in partnership with companies such as Yorkshire Bank and Clydesdale Bank.
Last year, the mutual's non-profit and with profit funds demonstrated a "robust" capital ratio, achieving more than three times coverage of statutory capital requirements.
New premium income for life funds fell by only 17 per cent, largely due to a decision to move away from high commission intermediary single premium business.