Mutually beneficial: Scottish Friendly posts strongest new business figures in 162 years

Record-breaking sales of £51.1 million, on the industry standard measure of annual premium equivalent, were recorded for 2023, up from £47.7m a year earlier. Assets under management, meanwhile, increased to £4.6 billion last year, from £4.5bn in 2022, the group’s latest annual results reveal.

The number of members increased by 24,000 to 838,000 over the same period. Scottish Friendly currently administers almost two million policies. During 2023, customers who invested in the Scottish Friendly with-profits fund would have enjoyed an extra 2 per cent return to the value of their plan on top of the investment return achieved.

The mutual has roots stretching back to 1862. Established as the City of Glasgow Friendly Society, its name changed in 1992 when it took over Scottish Friendly Assurance. It continues to pursue a strategy of organic growth, mergers and acquisitions, and business process outsourcing.

Strong protection sales delivered a decent uplift in 2023 as more people sought to protect their income and family members. However, despite contributing to profits, sales of the group’s own-brand investment ISAs (individual savings accounts) and junior ISAs fell as the higher interest rate environment led more people opting to save into cash rather than invest in stocks and shares products.

Chief executive Stephen McGee said: “It has been another positive year for Scottish Friendly, especially given the wider context of economic and market uncertainty. One of the things that’s been satisfying to see is people’s determination to save. We have also seen real growth in protection sales through our partnerships.

“Hopefully with wage increases catching up with inflation and interest rates easing we will see the economy turn more positive. We are quietly optimistic. People should begin to gain a bit more confidence and we are well placed to benefit from that.”

He said the group had invested further in the business this year to enhance its operations, technology, security, infrastructure and people.

Chief financial officer Alan Rankine added: “These figures underline our robust financial fundamentals, strong operating performance, and that, combined with a customer-centric strategy and vision, we are well-positioned to continue to grow. As a financial mutual it’s fantastic to be able to share the benefits of that strength and success with Scottish Friendly’s members and we are proud to do so.”

Meanwhile, fellow mutual Scottish Building Society has posted the highest ever savings balance in its 175-year history. Savings balances have grown by more than 17 per cent in the last 12 months to £490m-plus. The organisation’s annual results also show the highest pre-tax profit the building society has ever posted of £4m.

Chief executive Paul Denton said: “These historic results are the accumulation of a near two-century commitment to providing fair and trusted support to our membership. As a mutual, we make decisions exclusively for the benefit of our members, not shareholders. At a time when banks are looking to cut costs, we are reinvesting in what our membership tell us are important to them.”

Scottish Friendly vows to 'build on legacy' left by Jim Galbraith