Co-op Insurance

Last updated
Co-op Insurance
TypeSubsidiary undertaking
Industry Insurance services
Founded29 August 1867 (1867-08-29)
Headquarters,
United Kingdom
Key people
Mark Summerfield
CEO [1]
Products General insurance
Revenue£4.4 billion [2]
Parent The Co-operative Group
Website www.coop.co.uk/insurance

Co-op Insurance is the trading name of CIS General Insurance, a general insurance company, which is part of the Co-operative Group, based in Manchester, United Kingdom. Co-op Insurance Services, an insurance intermediary incorporated in 2017, is a wholly owned subsidiary of CIS General Insurance. [3]

Contents

For most of its history, Co-op Insurance was also a life insurer and fund manager, sharing surpluses with holders of its 'with-profits' life policies, as well as with individual members of The Co-operative Group in proportion to their general insurance patronage. In 2013, Royal London Group agreed to buy the life insurance business unit for an estimated £219 million. [4] As a result, Co-op Insurance currently offers business, home, motor, travel and pet insurance products.

History

The Grade II listed CIS Tower, designed by G.S. Hay and Gordon Tait. Co-operative Insurance Society Tower, Miller Street, Manchester (2) (geograph 2757249).jpg
The Grade II listed CIS Tower, designed by G.S. Hay and Gordon Tait.

The Co-operative Insurance Company Limited was formed in 1867 to provide fire and fidelity guarantee insurance to co-operative societies. In 1886, at an Annual General Meeting it was resolved "...that Life Assurance be undertaken by the Company, and that the shareholders forfeit any rights they may have to the profits of the Life Department and agree that they shall belong exclusively to the Policyholders." [5] In 1899, industrial life business was also introduced and the company was converted into an industrial and provident society, changing its name to Co-operative Insurance Society Limited (CIS). [6] Other classes of business were provided for the general public and not just for co-operative societies and their members.

The shares of the Society were taken over by the Co-operative Wholesale Society and the Scottish Co-operative Wholesale Society in 1913. In 1973, the Scottish Co-operative Wholesale Society merged with CWS. CWS became The Co-operative Group on merger with Co-operative Retail Services in 2000.

In 2002, due to the poor performance of CIS, Co-operative Financial Services was created as a holding company for both CIS and The Co-operative Bank including Smile, the first full internet bank and, in 2008, The Co-operative Insurance and The Co-operative Investments trading names were introduced. In 2011, Co-operative Financial Services became the Co-operative Banking Group.

In 2006, CIS split its life and general insurance businesses into two separate entities, establishing CIS General Insurance Limited [7] within which all new and renewing insurance business was written. All existing CIS general insurance business was reinsured with CISGIL and CIS continued to write long-term savings and insurance business only. CFS Management Services Limited was created at the same time to provide common support services to both CIS and CISGIL. In 2011, after 125 years, The Co-operative Insurance announced that it would cease providing life assurance products.

Divestment

In March 2013, the Co-operative Banking Group agreed to sell the life insurance, investment and pension businesses to the Royal London Mutual Insurance Society, due to ongoing issues with internal management capability. The intention to sell the general insurance aspect was also announced, [8] although in the event of a sale, it stated it would continue to sell re-badged products under The Co-operative Insurance name. [9] The administration of the life portfolio had been managed by Capita Group since 2007 in an attempt to reduce operating costs. [10] In May 2013, the Co-operative Banking Group withdrew from the agreed purchase of the TSB business after regulators uncovered the extent of issues within the company. In June, the Group revealed a shortfall in its accounts of up to £1.8 billion, related to bad debts on commercial real estate, belated costs following the 2009 purchase of Britannia Building Society, and a failed overhaul of key IT systems.

In July 2013, Co-operative Insurance Society became a private company limited by shares under the Companies Act, changing its name to Royal London (CIS) Limited. [11] Subsidiary undertakings, CIS Unit Managers Limited (trading as The Co-operative Investments) [12] and CIS Policyholder Services Limited [13] became RLUM (CIS) Limited and RL Marketing (CIS) Limited respectively. The Co-operative Asset Management Limited [14] also transferred, becoming Royal London Asset Management (CIS) Limited. Excluded from the sale, CIS General Insurance remained with the Co-operative Banking Group. [15]

In January 2014, The Co-operative Group announced its decision not to sell the GI business. The proceeds of the sale (announced on 21 March 2013) were envisaged to be a part of the Group’s planned £1 billion contribution to the recapitalisation of The Co-operative Bank. The revised terms of the Recapitalisation Plan, as set out on 4 November 2013, involve a smaller Group contribution and have allowed the Group, as part of its wider strategic review, to reconsider its plans. The Co-operative Group no longer owns any part of the former Bank.

In 2020, Co-operative Group sold the insurance underwriting business for £185million, leaving the Co-operative name as a marketing and distribution brand only . [16]

Operations

The Society's head office on Miller Street in Manchester city centre was, at the time of completion in 1962, the tallest building in Europe, standing at 387 feet (118 m). Since the opening of the Beetham Tower in 2006, it is now the second tallest building in Manchester. In 2006, using a government subsidy, the CIS Tower was clad in solar panels due to a large number of 1960’s tiles falling off the building, becoming Europe's largest vertical solar array.

Co-op Insurance currently offers business, home, motor, travel and pet insurance products. Pet insurance is provided, underwritten and administered by Allianz Insurance, part of the Allianz (UK) Group. HomeRescue Plus, motor breakdown et cover and accident recovery service are provided on behalf of Co-op Insurance by AXA Assistance (UK).

The Co-op Insurance has a tradition of football sponsorship. It has previously sponsored the Scottish League Cup in Scotland and the Irish League Cup in Northern Ireland.

Membership

Members of The Co-operative Group and participating regional societies earn membership points on the products they hold. Points are converted into dividend at a rate agreed annually by the Board. [17]

See also

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References

  1. "Mark Summerfield: Executive Profile & Biography - Bloomberg". bloomberg.com. 2017. Retrieved 27 October 2017.
  2. "Co-op Insurance 2016 Annual Report and Accounts".
  3. Registered as a Co-operative Society under the Co-operative and Community Benefit Societies Act 2014, No. RS004390. Entered in the Financial Services Register, Firm No. 779364
  4. Co-op agrees £219m sale of its insurance arm to Royal London Manchester Evening News, 19 March 2013
  5. The Co-operative Insurance The Co-operative Banking Group (retrieved 24 August 2013)
  6. Registered under the Industrial and Provident Societies Act 1965, No. 3615R. Authorised and regulated by the Financial Services Authority, entered in the Register under No. 150965
  7. Originally registered under the Industrial and Provident Societies Act 1965, No. 29999R. Converted into a company limited by shares under the Companies Act 2006, No. 12698289, in 2020. Entered in the Financial Services Register, Firm No. 435022
  8. End of an era: Co-operative Group set to sell-off General Insurance Co-operative News, 21 March 2013
  9. Bibby, Andrew Britain is turning its back on co-operative insurance The Guardian, 7 May 2013
  10. Capita Group plc and Co-operative Insurance sign major outsourcing contract Archived 2013-11-04 at the Wayback Machine Capita Group, 15 October 2007
  11. PRA approves Royal London’s acquisition of the Co-operative Group’s life insurance business; FCA approves acquisition of Co-operative’s asset management business The Co-operative Banking Group, 26 July 2013
  12. Registered in England and Wales under the Companies Act 1985, No. 2369965. Entered in the Financial Services Register, Firm No. 144032
  13. Registered in England and Wales, No. 3390839. Entered in the Financial Services Register, Firm No. 188391
  14. Previously CIS Investment Management Ltd. Registered in England and Wales, No. 3858994. Entered in the Financial Services Register, Firm No. 141665
  15. Welcome to the Royal London Group The Royal London Mutual Insurance Society, August 2013
  16. "Co-op agrees to sell insurance underwriting business to Markerstudy and creates distribution agreement for home and motor policies". www.co-operative.coop. Retrieved 22 June 2021.
  17. The Co-op Membership The Co-operative Group (retrieved 27 August 2013)