Engage Mutual and Family Investments boards agree to merge but it’s now to the businesses members to agree the deal
Engage Mutual and Family Investments have announced today that both Boards has made a formal recommendation that the two Societies merge to form one of the UK’s largest mutual insurers with over 2 million customers. The organisations would focus on helping families work together across generations, to save, invest and protect.
As a Mutual is a customer owned organisation, Engage will write to all its members and ask them to consider and vote on the proposed merger in the coming weeks. If the deal is approved by members the new combined mutual would have approximately £6 billion assets under management, with members of both boards and executive teams represented in the new organisation.
It is envisaged that current Engage Chair, Christina McComb would become Chair of the joint organisation and Family Chief Executive, Simon Markey, would become Chief Executive. In different ways, Engage and Family are both focused on meeting the financial needs of families. Members of the merged business would benefit from being part of, and having a say in, a larger, even more financially secure organisation.
Engage and Family say the enlarged business would be committed to increasing the scale and scope of the valuable benefits it provides to its customers. From a commercial perspective, greater economies of scale would provide operational efficiencies, enhanced new business opportunities and a larger and improved capital base.
Engage Chairman, Christina McComb, said: “It is clear to the Board that to join forces with Family would be in the long term best interests of our members. A merger with Family would accelerate our strategic intent to create a customer-owned business that delivers unmatched value, service and customer benefits. We believe that combining our businesses would demonstrate the value of the mutual model through consolidation of our considerable individual financial strengths while maximising joint skills and capabilities to deliver a broader range of products and services to help families of all ages at key life stages.”
Engage has ensured that should the transaction proceed, the future of the Engage Foundation, its unique £1m customer benefit fund, would continue. The merged business intends to commit £5m over 5 years, which would expand the Foundation significantly.
Engage Chief Executive, Peter Burrows, said: “What matters to us is what matters to our customers. We believe being stronger together as a single business is the best way for us to deliver greater value, long term strength, and make a positive difference to the lives of our customers and their families. We will now seek the approval of our membership to merge with Family on this basis.”
Simon Markey, CEO of Family Investments said: “I am delighted to announce today our proposal to merge with Engage Mutual. The merger would combine the expertise and product strengths of both organisations and increase the scale at which we are able to provide solutions for families at key life stages, from parenthood to retirement.”
Markey continued: “After many months of careful consideration we are delighted to recommend this merger to our members. Engage has a very strong performance record and both their culture and customer base complement ours. This is about two strong mutuals joining forces to create a bigger, more effective business, delivering greater value and long term benefits for our members and communities.”
“Family already looks after the savings of around 2 million families and since 2008 we’ve managed the Post Office ISA, helping adults save for their future too. 2013 saw strong financial results with profits increasing by 30%. Now we want to take the next step, investing in order to increase our solutions for families as their needs change. Families across the UK are crying out for a proposition they can trust from a business that understands their changing needs. We passionately believe this merger will provide this opportunity for existing and future members of both organisations.”
The combined business would have in excess of £130 million of capital reserves.