Engage in good health as it secures key acquisition

HARROGATE-based Engage Mutual Assurance yesterday revealed that it had secured a key acquisition which will boost the size and efficiency of its health business.

Andrew Haigh, the mutual's chief executive, also said that an "important announcement" was planned in connection with the development of Engage's health business in the near future.

He declined to comment further, but the Yorkshire Post understands that the announcement will be made in early 2011.

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Mr Haigh said he was keeping a tight control on costs as the UK faced an "incredibly challenging" economic environment.

Engage Mutual has acquired Provincial Hospital Services Association (PHSA), a not-for-profit healthcare provider specialising in health cash plans and private medical insurance, for an undisclosed sum.

PHSA, which is based in Bedford, dates from 1919 and has 12 staff.

In a statement, Engage said the acquisition was part of a strategy to increase its presence in the healthcare market.

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The statement added: "The acquisition of PHSA will enhance economies of scale within Engage Mutual's existing health cash plan business, and add 13,000 new healthcare customers.

"Both organisations share ethical values and a commitment to customer service. PHSA was the first insurance company in the UK to receive the Ethics Mark in recognition of its fair business conduct."

Mr Haigh said: "We welcome PHSA customers and staff to an established and growing organisation which has a dedicated customer-centric approach they will no doubt be familiar with, and we look forward to continuing with the same high standards.

"The acquisition of PHSA is another milestone in our progress as a customer-owned business to increase our presence in the healthcare market, which is part of a long-term strategy to offer a comprehensive range of simple, relevant products to assist families with their financial planning."

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Engage provides life insurance, savings, investments, and health cash plans.

Health cash plans provide cash back on health expenses, such as dental and optical treatment, helping families to meet the costs of everyday healthcare.

The acquisition of PHSA follows Engage's announcement in August that it was entering into a transfer of part of the long term insurance business of Gloucester-based Ecclesiastical Life.

Ecclesiastical Life is part of the Ecclesiastical Group, which provides financial products and insurance services for individuals, families, groups and organisations

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Mr Haigh said the proposed transfer to Engage is due to complete before the end of this month.

The transfer will add 15,000 members and around 270m to funds under management.

Customer numbers at the Mutual have increased for each of the last 12 years and following the acquisition of PHSA they stand at 457,000.

In August, Engage revealed that its customer numbers rose by 1.3 per cent to 444,645 over the first six months of the financial year.

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In recent years, Engage, which used to be known as the Homeowners Friendly Society, has expanded rapidly after delivering a robust financial performance.

It merged with the UK Civil Service Benefit Society and has also bought health plan business Premier Health Benefits.

In the first six months of 2010, the fund for future appropriations – which is a friendly society's equivalent of a profit performance – rose by 1.9m to 33.7m.

However, group assets under management fell by 20m in the first six months of the year to 604m.

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Yesterday, Mr Haigh said that healthcare policies provided by a mutual had a strong appeal during challenging economic times.

Engage has been the title sponsor of rugby league's Super League since 2005.

Earlier this year, Engage confirmed that it will continue to sponsor the 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 feeling

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One of the UK's largest mutual friendly societies, Engage Mutual was established as the Homeowners' Friendly Society in 1980.

The organisation was rebranded as Engage Mutual Assurance in 2005, which through itself or one of its subsidiaries, provides child trust funds, health cash plans, tax exempt savings plans, single premium investment bonds and over 50s life insurance.

The Harrogate based mutual employs 174 people.

Engage Mutual is a member of The Association of Financial Mutuals, the body which aims to develop and support a strong mutual insurance sector.