Bernard Ginns: A bit more transparency would help mutual Engage more

The Harrogate-based friendly society, which provides savings, investment and life insurance products, said it had significantly improved its new business sales performance, maintained its strong capital position and increased staff numbers by more than 7 per cent to support its growing business during the first half of 2012.

For good measure, Engage added that its customer numbers remain in excess of half a million.

On premiums and claims, the society trumpeted “a strong overall new business performance”, led by sales of over-50s guaranteed life insurance, which delivered an “impressive” £2.9m total new annualised premium income, up from £2.4m the same period last year.

Within that, Engage said sales of over-50s guaranteed life insurance policies were up more than 60 per cent. So far, so good.

The mutual said overall premiums were £29.8m. It added that it paid out £49.8m to its customers in insurance claims and savings payouts and maturities.

The press release closed with a statement from the chief executive Andrew Haigh, in the post since 2002.

He said: “We are very pleased with results for the first half of 2012 which provide a strong platform for the ongoing development of the business.”

At first glance, another example of a Yorkshire business doing well in challenging circumstances.

Closer inspection revealed some omissions however.

There was no mention anywhere of overall premiums and payouts for the same period last year – crucial figures for any meaningful comparison with past performance.

A phone call to the press office revealed that overall premiums had in fact fallen from £32.8m the same period last year. That equates to a fall of more than nine per cent.

A spokeswoman attributed the decline to the Government’s withdrawal of the child trust fund scheme.

On questioning, the press office also revealed that the amount paid out to members had also fallen – and sharply. Claims were down 18 per cent during the first six months of 2012.

The bulk of the fall came from a 29 per cent decline in investment payouts. The spokeswoman explained: “The first half of last year saw a lot of savings maturities that we haven’t seen repeated this year.”

So, let’s get this straight. Engage issues a press release hailing an “excellent” start to the year, but omits to mention that income from premiums has fallen nine per cent and payouts to members were down by 19 per cent. Both are key measures of performance of a life savings business, I would argue.

Oversight? Possibly. Possibly not. Maybe the directors did not think it relevant. But if I was a member entrusting my money to Engage I would expect to be told this kind of information. Indeed, omission of this order raises wider questions about trust.

Regular readers will know that I have been a vocal supporter of the mutual movement and on one level it is good to see a friendly society increasing workforce and remaining strong in terms of capital levels, as Engage did on both counts in the first half of 2012.

But I expect plain dealing and transparency in return. And this kind of press statement – sloppy or otherwise – does not engender feelings of friendliness.

Something for the CEO – whose salary and benefits rose 13 per cent to £306,000 last year – to ponder on perhaps.

It might be too early to start talking about green shoots, but it can be seen as a promising sign when retailers raise the stakes by talking down the competition.

I am referring to Republic, which opened its first flagship store on Friday. The fashion chain was founded in Leeds a quarter of a century ago and has developed into a £225m turnover business with 120 stores.

Republic returned to its Yorkshire roots with its flagship store, launched with performances by pop stars Tyler James, Angel and Jess Mills and boasting 13,000 sq ft of retail space.

Republic wants the site to become the prototype for a new portfolio of landmark stores.

Simon Singleton, the retail director, said the company made a conscious decision to choose an imposing building for its flagship store, which dates back to the 1870s, rather than take space in one of the new shopping schemes.

“We decided that opening in the Trinity Leeds scheme would be too ‘vanilla’,” he said. “Instead, we want landmark buildings.”

Ouch. I doubt if Land Securities thinks of its scheme as “vanilla”. But with Trinity, the revived Eastgate scheme and stores like Republic challenging for high street spend, it can only encourage consumer spending.