It is popularly presumed that the stock markets give a rough glimpse of a country’s economy. On a short-term basis, this is true in some cases but we need to remember the economy’s condition during the 2020-2021 period when the stock markets were enjoying a rally even though the GDP was just chugging along. The current sentiments are unanimously distressing on the market and the economy. This is largely credited to rising inflation and the global stagflationary environment.
The ongoing tensions in Europe and global supply chain constrictions have further led to a rise in inflation across several developing and developed nations. Policymakers are looking to strike the right balance in their monetary policies and set the pace to the post-pandemic recovery. In the midst of all these global financial instabilities, the citizens of the globe have to venture into some intelligent investment opportunities to sustain their future.
A mutual is one of the best investment options as it is exclusively owned by its customers, known as the members, and is run for the benefit of its members. They do not have any shareholders to pay, as in public limited companies. World Business Outlook recently recognised Scottish Friendly as ‘Leading Mutual Insurer UK 2022’ and ‘Best Junior ISA Provider UK 2022’ and ‘Best Tax-efficient Products Provider UK 2022’.
Making people tax efficient
The honorary titles from World Business Outlook indicate the excellence and commitment a firm has in delivering the highest quality of services and benefits to its clients and partners. Scottish Friendly, with a steadfast resolve toward offering understandable and accessible financial products to individuals, has grown itself as one of the largest mutual life offices in the UK. Starting in 1862, the City of Glasgow Friendly society turned into Scottish Friendly Assurance in 1992. Later, in 2007, the company made its biggest business move with the takeover of Scottish Legal Life. It ventured into a string of business partnerships including Royal London, Phoenix, Smart Insurance and Golden Charter.
Scottish Friendly offers Individual Savings Account (ISA) using the growth potential of the stock market. As per reports, Scottish Friendly saw a total sales of GBP 46.9 million APE in 2021 with its assets under management growing to GBP 5.4 billion. Their solvency capital crossed the regulatory requirements with 174% on 31 December 2021, up by 12 percent. It witnessed a rise in the number of members from 745,000 to 776,000.
Scottish Friendly has reported GBP 25 million from sales of protection-based products, while the savings and investments products amounted to GBP 21.9 million. Its own brand sales increased from GBP 15.7 million in 2020 to GBP 18.4 million in 2021.
With AUM of over GBP 5 billion after acquiring Canada Life, Scottish Friendly is currently enjoying rave reviews for its smartphone-based app, ‘My Plan’, which enables investments anywhere and everywhere. The app, available for ‘iOS and Android’, has provisions for monitoring the fund performances, correspondences related to policies and strategizing your future investments.
Building socially responsible investments
Some of the prime reasons why Scottish Friendly deserves ‘Leading Mutual Insurer UK 2022’ and ‘Best Tax-efficient Products Provider UK 2022’ was its sound corporate governance, responsible investing, and community contributions. They are committed to the government’s target of decarbonization and achieving net zero targets by 2050.
Stephen McGee, CEO of Scottish Friendly, explains, “We aim to invest our customers’ funds in a responsible manner and continue to develop our capabilities in this area, working with our investment managers to ensure the stewardship of our investments is consistent with our ESG aspirations.”
The Scottish Friendly Children’s Book Tour continued to deliver a full programme of ‘virtual’ activity, live streaming sessions and educational content into classrooms and living rooms across the UK. Working with some of the UK’s most popular authors and illustrators, the production of fun and exciting video content has been viewed 150,000 times through social media and a purpose-built on-demand library hub. Scottish Friendly is supporting some of the most vulnerable children and their families through associations with Action for Children in Scotland.
Democratizing Financial Independence
Being a purpose-led organization, Scottish Friendly has designed its products and services to meet the needs of every citizen of all age groups and income groups. Stephen McGee further explains, “The three core elements of our strategy, to ‘Diversify and Grow’ includes, organic growth through our own brand product range and distribution channels, forming new partnerships and to launch new products with existing partners and through acquisition and consolidation activity.”
As a member of the Association of Financial Mutuals, Scottish Friendly maintains the best practices in its key processes. Regulated by the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA), the firm has been enhancing its policies, processes, and systems with regard to operational resilience, climate change and fair treatment and protection of vulnerable customers.
Growth in Adverse Conditions
2020 and 2021 were some of the most challenging times of our lives in recent years. Scottish Friendly has not only maintained its growth trajectory during those periods but has also reported a record-breaking year for sales of new business. In 2021, Scottish Friendly entered into a strategic investment relationship with both JP Morgan Asset Management and abrdn plc. These new tie-ups enable access to market insights, support the delivery of investment returns for its customers and much-needed additional flexibility for a volatile market.
Scottish Friendly has unveiled a colleague engagement survey that reports 86 percent of its employees feeling proud in working for the company and 9 out of 10 saying that they are content with their team. Withstanding some of the adverse conditions like the global pandemic and the economic gloom, Scottish Friendly has strengthened its HR functions, launched company values and introduced a new colleague recognition scheme.
At the announcement of the award from World Business Outlook, Stephen McGee shared, “We continue to invest in our business, looking to improve how we operate. We invested in new technology to strengthen our Risk Management Framework and are focused on delivering further enhancements to our business operations by use of automation, technology and continual cost management efficiencies. Through innovation, efficient customer services and responsible capital management, Scottish Friendly is well placed to achieve our objective to provide long-term sustainable growth in value for our members.”
Article by Ujal Nair