This article considers the top six Friendly Societies with an adviser focus. We look at headline numbers, products and market and strategic positioning, finishing with provider-specific content.
- Premium income
- 98k is the in force plan count (2018 accounts, members not disclosed).
Several Societies saw significant growth over the 2018-19 period.
|The Exeter||Y||N||Y (3)||N|
- This is shorthand for a combinations of traditional savings plans (with a limits of e.g. £ per month contributions), ISAs, Child Trust Funds and JISAs (the CTF replacement).
- The Exeter offers two term products for those it believes are under-served.
Summary of over-50s providers
Market and strategic positioning
The six Societies covered in this document fall into three categories.
The big society is OneFamily. While they probably want to grow their protection presence, the main immediate challenge is to maintain and ideally grow their core business, which is small retail investments — in particular the former Child Trust Funds, which start maturing in September 2020.
The growing society describes The Exeter. They have clearly made significant advances in recent years, including the development of new products and volume growth. We should probably expect them to do more of the same. At what point might they break into the “main” term market?
The niche societies are the final four players: British, Cirencester, Holloway and Shepherds are smaller and more niche than the two Societies above. While some have investment products as well as Income Protection none have life or critical illness term. Who will make the break?
Friendlies: their straplines
Do a Google search and you find:
- OneFamily : Savings, Lifetime Mortgages & Over 50s Insurance
- Shepherds : Savings and insurance
- British : Income Protection specialists
- Holloway : The original Income Protection specialists
No strapline is offered by The Exeter (where a Google search brings up The Exeter: Home) and Cirencester (where a Google search brings up Cirencester Friendly).
- Chief Executive: Teddy Nyahasha (2020)
- 2019 report and accounts
With 2.6m customers OneFamily stands out. Interestingly 1.6m are young people with Child Trust Fund accounts which start to mature in September 2020. Retaining these will be the challenge.
OneFamily’s products are:
- Child Trust Funds, as above
- ISAs and LISAs
- Junior and Family bonds (classic £25 per month)
- Lifetime mortgages, with a whole-of-market advisory business
- An over-50s product with a difference, mainly sold through IFAs
- Chief Executive: Andy Chapman (2008)
- The Exeter 2019 report and accounts
The Exeter has c98k customers and as at 31/12/2019 employed 145 staff, including management.
The Exeter’s products are:
- Income Protection
- Life insurance (Real Life and Managed Life)
- Private Medical Insurance (Health+)
- Health Cash Plans
Unusually, The Exeter’s insurance businesses consists of both life and general insurance, respectively 1-2 and 3-4 above. Distribution is primarily through financial advisers and broker networks.
The Exeter has actively developed its product range in recent years. A new version of the PMI plan (Health+) was launched in September 2018, while 2019 saw Real Life rolled out to the whole adviser market and a range of free medical advice and treatments service, including a HealthWise app..
Managed Life is specialist life cover for people who suffer from type 2 diabetes or who are overweight. It has reviewable premiums: The Exeter asks for evidence of the customer’s condition each year and if the policyholder gets healthier premiums reduce — and vice versa.
Real Life is specialist life cover for people living with serious or multiple health conditions.
Health+ is private medical insurance.
The Exeter is clearly advancing, with a vision to become the protection provider of choice for its customers and distribution partners by developing quality products, efficient processing and rapid claims payment. Interestingly it also seeks M&A opportunities.
Shepherds Friendly Society
- Chief Executive: Ann-Marie O’Dea (2015)
- Shepherds Friendly Society 2019 report and accounts
Established in 1826, Shepherds offers the following products:
- Junior and adult bonds and ISAs
- Income Protection
- Over-50s life cover
Cirencester Friendly Society
- Chief Executive: Paul Hudson (1997)
- Cirencester Friendly 2019 report and accounts
Founded in 1890, Cirencester has a long history. It now sells several Holloway and non-Holloway Income Protection products, although it has avoided short term Income Protection (STIP) variants.
British Friendly Society
- Chief Executive: Gordon Hull (2019)
- British Friendly 2019 report and accounts
British Friendly’s 2018 accounts suggest that it want to grow in its members’ interests, expanding its distribution and product reach — potentially beyond income protection.
It no longer sells a traditional Holloway plan, with growth since 2011 coming from “pure protection” Income Protection products.
Holloway Friendly Society
- Chief Executive: Stuart Tragheim (2016)
- Holloway Friendly Society 2019 report and accounts
In line with several other societies, Holloway has invested in upgraded IT systems (PRISM for Holloway). Perhaps it is this which allowed it in 2018 to achieve an average time from application to underwriting decision of just 4 hours.