Chief Executive Report

Overview

In a time of unprecedented challenge, the Society has been there to support a growing membership, ensuring that the Society’s strategies and business model remains sustainable and positioned for future success. In response to the rising cost of living the Society has offered a range of options to pause, or even reduce, premiums in order that our members can continue to benefit from the peace of mind and financial security provided by the Society’s products. Many members have taken advantage of these measures and I am delighted that the Society’s membership has grown in 2022. Developing the Society’s membership is at the heart of our strategy and a key part of ensuring the Society’s future financial sustainability.

The Society’s growth in membership has been achieved through the implementation of the strategic plans developed by the Society’s Board in 2021. The migration to a new policy administration and new business platform in January 2021 provided the technological base to enhance the Society’s products, propositions and services. The Society’s teams have worked relentlessly to deliver improvements and enhancements that are now benefiting members and providing excellent service to our intermediary partners. One of the many enhancements was the introduction of guaranteed level premiums. Guaranteed level premiums remain the same throughout the life of a policy and are a popular option amongst our members and intermediary partners.

Through reviewing and enhancing the Society’s products and proposition we have broadened our reach and increased the number of new members and new intermediary partners throughout 2022. In January 2023 we increased our reach again by providing the option of adding Fracture Cover to new income protection policies. Fracture Cover provides a lump sum payment to support the additional costs associated with an injury. The launch of Fracture Cover has already proved a popular addition to the Society’s proposition amongst new members and our intermediary partners.

The new policy administration and new business technology platforms have allowed the Society to improve services to new and existing members and intermediary partners.

I am delighted with the fantastic feedback we have received from members and our intermediary partners in 2022 and we will strive to deliver further service improvements throughout 2023.

Despite the positive growth in membership the Society is not immune to the U.K.’s financial challenges and over 2022 took appropriate risk management actions to improve the Society’s controls and solvency position which has strengthened to 189% (2021 161%). Through 2022, the Society has enhanced its people, processes and controls capabilities in order to enhance resilience, reduce risk and ensure we deliver great member outcomes. The Society has reduced market risk and insurance risk by decreasing investment exposure in equities and commercial properties and entering morbidity and persistency reinsurance agreements. As always, capital management remains a key priority, and as with other key metrics the solvency coverage ratio is tracked on a monthly basis, and its monitoring forms part of the process to ensure delivery of the strategy is consistent with the Board’s risk appetite.

Business development Strategy

The Society’s purpose is to be a trusted and relevant provider of financial support for our members in times of need. The increase in the cost of living has impacted the Society and that includes the Society’s members, employees, intermediary partners and their families. As a committed Mutual organisation, we are able to consider the situation of each member and we are committed to pay valid claims as quickly as possible. I believe that the Society can do even more than paying valid claims and we are proud of our partnership with Innovate, a leading provider of recovery and rehabilitation services. Whilst the Society provides financial protection, we believe that we can also improve our members’ long-term physical and mental health by helping them return to work as quickly as it is safe to do so. We know how important this can be to our members.

In 2022 we simplified and improved the health and wellness support that the Society can provide to members through the Mutual Benefits programme and our partnership with Square Health. It has been fantastic to see so many members accessing the healthcare services we offer to members and their families through the Clinic in a Pocket app.