Building on the Friendly Society Legacy

By Andy Morris

Friendly societies have played a vital role as mutual insurers in supporting people and communities for more than 200 years. They have fostered social cohesion and provided essential financial support when it has been most needed, allowing members to proactively secure the lives they’ve built.

I passionately believe in mutuality as an alternative business model that remains relevant for the challenges of the modern world. I’ve seen first-hand the enormous benefits friendly societies offer their members, stepping in to help when people are at their lowest and most vulnerable. They are about putting people first, above everything else, something that is more crucial than ever given the current global political climate. They offer hope, kindness and support in a world that can sometimes seem devoid of these qualities.

Cirencester Friendly wholeheartedly supports the current Law Commission consultation on friendly societies that is open now until 11th June. This process is long overdue and something that we’ve long supported as active members of the Association of Financial Mutuals, the mutual insurers trade body. It is over 30 years since the last version of the Friendly Society Act was passed in 1992 and we, together with others in this sector, have been campaigning for some time for a comprehensive reform of the legislation.

It is necessary to modernise the legal and regulatory framework to allow friendly societies to compete with other insurers, providing consumers with more choice. These changes will allow us to continue to serve the best interests of Members while offering them improved outcomes for being more than just a customer. Being a Member should provide improved peace of mind and make them feel part of an organisation who are genuinely concerned with their welfare.

This review should not just be about repealing archaic elements of a law that is over thirty years old, important though this is, it should be viewed as a golden opportunity to remove barriers and enable mutuals to flourish. The Labour government has stated it would like to see the mutual sector for financial services double in size during this parliament. Changes in the law will help this to happen and should also give us the confidence to be proud of what we do and be bolder in how we communicate that to the wider community.

At the heart of our mutual heritage has always been a commitment to innovation - developing new products and services which meet people’s needs.

Reforming the legislation will create the opportunity to unlock that innovative energy and apply the principles of mutuality to developing new solutions to today’s challenges. I am keen to use this process to enhance the service we offer to Members currently, while remaining true to our 135 years of history as a friendly society.

The UK insurance sector is a large and vibrant one that we do not shout about enough, with space for different business and ownership models, which provide consumers with a great range of choice. Cirencester is proud to be part of the growing mutual presence in these markets and we want to see this enhanced in the near future. This growth can be for the whole market, as it provides a chance to improve the financial representation for those sections of society that have been underserved by institutions for years.

Reform like this is a once in a generation opportunity. We encourage all concerned to fully participate in this process, which provides for much-needed public debate. It addresses a wide range of issues which have constrained the sector and hampered its growth, taking in both technical and legal points and more substantial and strategic policy issues, like access to external capital and restrictions on business activities. The ability to have access to capital to enable growth is important, providing it is done in the right way to invest for the future to benefit our Members. Removing business restrictions would enable mutuals to expand into markets where friendlies and others can make a difference, particularly for people currently under-represented. This means expansion can be focused on increasing the levels of protection in the UK and hence growing the overall insurance market, which benefits the whole of society. This is particularly pertinent for income protection, which is our speciality. This is a unique opportunity to retain the mutual heritage of friendly societies, so we can serve our Members even better for the next hundred years and beyond.