What do people think of mutuality?
31st October 2013
Benenden health is an active member of the UK-wide trade body, the Association of Financial Mutuals (AFM), The AFM represents mutual insurers, friendly societies and other mutuals.
Launched in 2010, following the merger of The Association of Mutual Insurers and the Association of Friendly Societies, AFM now comprises 53 member companies, who collectively look after the savings, protection and healthcare needs of 20 million customers and manage assets of £100 billion.
The Association of Financial Mutuals recently released the findings of extensive market research carried out in the last year – with the aim to promote the value of mutuality.
The research, taken from six consumer insight surveys explores public perceptions on the meaning of mutuality. The findings demonstrate public confidence in the customer service provided by mutuals and an increasing move towards the ethics of a business becoming important when consumers choose who to deal with.
Lawrence Christensen, Marketing Director at benenden health said: “These findings clearly demonstrate that mutuality is a significant draw when customers are making their decisions about which organisations to deal with. There is also a great deal of positivity linked with the concept of being a mutual.
“Mutuality fosters a sense of community ownership - allowing customers to have influence on the direction of the organisation. benenden health’s own democratic membership process gives our members the opportunity to be directly involved with shaping our future and making the decisions about how we are run.
“The absence of shareholders also helps to inspire trust, as customers can rest assured that any profits made go straight back into the business.”
The top ten findings from AFM’s research were:
1. Mutuals were the top choice (25%) when the public was asked which type of financial services organisation they rated most highly for providing friendly customer services, ahead of banks, credit unions, supermarket banks, insurance companies, fund managers and online brokers.
2. There is a range of positive values and words that the British public are most likely to associate with mutual insurers and friendly societies. These include: ethics (23%), responsibility (23%), trust (21%), community (21%), fairness (21%), honesty (20%), commitment (19%) loyalty (18%), prudent (18%), caring (17%), belonging (15%) and selflessness (12%).
3. If members of the general public could run a financial services company for a day, many would make sweeping changes: 60% say they would make products simpler to understand, 49% would ensure customer interests were put before those of shareholders and 34% would put customer representatives on the management board.
4. More than three in ten adults said they were planning to change two or more financial services product providers in the year ahead - 27% shopping around on general insurance and 18% planning to change their bank or savings provider.
5. When it comes to savings and current accounts, the top things people look for in a good financial services provider are; products that are easy to understand (50%), financial products that deliver good value in the long term (65%) and an organisation that puts customer interests before those of shareholders (46%).
6. For people that would consider switching to a financial mutual, some of the things they look for would be: reassurance that rates were shown to be better over the long term (30%), feeling assured that their money would be safer with them (27%) and assurance on the organisation’s financial strength (26%).
7. Switching to a mutual. The products people are most likely to consider a mutual for would be a savings account (36%), insurance (24%) and mortgage products (16%).
8. For the members of a mutual, a number of things are more important than they were two years ago – the ability to speak with someone face to face (48%), simple products (47%) and an organisation that does not pay excessive executive bonuses (55%).
9. For the population at large, responsible business as a theme is becoming more important when selecting a brand to buy a financial product from: 26% of people say they would sacrifice better rates in exchange for a service that better reflects how they think a responsible business should behave. Set against this, 33% would not. Further, around one in four people (24%) say that now more than ever they feel they have a responsibility to make financial decisions that benefit the greater good rather than simply for personal gain.
10. One in three people think energy companies, water companies and rail companies would all be better run and act more in consumer interest if they were mutualised.
For further information on AFM’s research work, take a look at the presentation made by Guy Bellamy of Elephant Communications to this year’s AFM conference: Seeing the world through the consumer's eyes