'Robust' Engage Mutual set to take on insurance business

Engage is asking its members to support a planned 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.

If the transfer is approved, it will add 15,000 members and around 270m to funds under management. The acquisition is expected to take effect from November.

Engage Mutual said it was continuing to explore potential acquisition and partnership opportunities.

It anticipates making a number of announcements over the next few months.

Andrew Haigh, the chief executive of Engage, said: "We remain firmly committed to a strategy that will deliver a long-term future for the organisation, through scale and increased cost effectiveness, secured by a combination of organic growth and market opportunity.

"Financial stability and control of expenses to ensure maximum efficiency continues to be a key focus." 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.

An Engage Mutual spokesman said: "This figure has reduced due to a combination of the stock market's performance, increased claims; and customers wanting early access or access on maturity to their savings.

"In less challenging economic times customers tend to keep funds in for longer."

Over the first six months of the year, Engage's customer numbers rose by 1.3 per cent to 444,645.

Engage said it was disappointed by the Government's recently announced changes to the child trust fund.

In May, the coalition Government announced plans to scale back child trust funds before phasing them out completely next year.

A spokesman stressed that Engage was committed to servicing and supporting its 200,000 child trust fund customers, who will still be able to make payments into their child trust fund after the changes come into effect.

Mr Haigh added: "In a tough climate, that looks set to get tougher, it's heartening to see that our customer numbers have again increased.

"As a customer-owned business, we are well placed to continue to offer the consumer a real alternative."