NFU Mutual, the UK’s leading rural insurer, is significantly increasing the Mutual Bonus given to its members after benign weather and a strong investment performance helped deliver profits of over £1bn in 2016.
Farmers with NFU Mutual will benefit from a substantial increase this year in the discount they receive when they renew.
Helped by stable weather conditions for most of the year, the insurer made an underwriting profit of £151m.
In a very good year for stock markets and commercial property, NFU Mutual made substantial investment gains and overall investment assets under management by the Group increased by £2.5bn in 2016 to £18.8 bn.
Sharing success
Lindsay Sinclair, Group Chief Executive, said: “Because we’re a mutual, running our business in the long term interest of our members, we’ll be sharing our financial success with our members.
“All our General Insurance customers – around a million people with farms, businesses, homes and cars insured with us – will see a significant increase in our Mutual Bonus payment, which comes in the form of a discount off renewal premiums.
“Both our insurance and investment activities performed very well in 2016. The very solid results for both the General Insurance and Life sides of the business have put us in a great position to continue to build on our financial strength during a period of ongoing uncertainty in the current market.”
NFU Mutual’s strong financial position continued to be underpinned by its prudent management of costs, claims handling, pricing and risk selection. All of which resulted in a combined operating ratio, a measure used by insurance companies to indicate how well they perform in daily operations, of 88.3%.
The new rates for Mutual Bonus will be announced later in 2017 and will come into effect from July. The Bonus will be paid as a percentage of renewal premiums.
