Reliance Mututal With Profits
RWP Research Findings, Overview and Comments
Reliance Mutual is a traditional mutual society; making it unusual in today’s With-Profits market-place where the majority of With Profits funds are now run by shareholder owned insurers. In recent years they have taken on the with-profits business of a number of small insurers including Criterion Life, Hearts of Oak Friendly Society and Time Assurance.
The Reliance Mutual With Profits position is strong compared to most of the rest of the market. As a mutual society they retain some, if not most, of the traditional hallmarks of the with-profits concept. A mutual society is one where its members effectively own the business. This means all the returns (after costs) and profits made within a fund can be allocated to the policyholders.
They generally have (comparatively) good With Profits performance, but this can vary depending on the type of policy and when it was taken out. They run four different sub funds (see below) and the performance and prospects for policyholders vary from sub fund to sub fund. One of the funds has next to no return attributed, whereas other funds have performed well. It is a mixed bag which does not warrant generalisation.
We assess Reliance Mutual as a company easy to deal with, providing transparency and they are financially strong. However in reviewing policies for With Profits investors we see a wide mix of past performance, depending on when a policy was taken out and what type of policy it is. Some past performance is poor; some is good. Some policies have compelling reasons to hold onto them, some are clearly risky with limited reward and offer policyholders limited value. On balance we feel many Reliance Mutual policies represent the better end of the market; avoiding some of the difficulties other providers have experienced.
However this should not breed complacency as with any company, your position will be dependent on a range of factors - you may be holding something solid or something flaky; we recommend if you hold a With Profits policy it should be fully reviewed on its own merits to judge how it is has performed and its future prospects.
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Company ownership position
Reliance Mutual is a mutual society, one owned by its members. They have over £1.8 billion in funds under management.
Reliance Mutual started its life in March 1911 as the Farringdon Reliance Friendly Collecting Society in London. It was the offshoot of another company, the Reliance Fire and Accident Insurance Corporation, which in June 1906 had started to write general insurance business, with policy holders paying weekly premiums.
In 1951 the Mutual Society was formed and 1958 saw the purchase of Reliance House, situated overlooking the spa town of Royal Tunbridge Wells.
In 2001, the Society relocated to new offices in the Great Hall, Royal Tunbridge Wells.
Starting in 2003, the Society has made 7 acquisitions of portfolios of other life assurers' business. The Society moved its operations to the new Reliance House in August 2010, coinciding with the Society's centenary year.
In 2012 policyholders were asked to vote on the future of the Society. The first time a mutual insurer has formally asked this question. The board received an overwhelming vote of support on the Scheme Arrangement proposed, which clarified how the business is run and the future entitlements of policyholders.
Reliance Mutual With Profit Funds
Their with-profits business is split into four “sub funds”, each of which is managed separately:
With-Profits Sub Fund 1 contains all the with-profits business originally with Reliance Mutual, Burslem Mutual and Nation Life.
With-Profits Sub Fund 2 comprises the former Criterion Life Assurance with-profits fund.
With-Profits Sub Fund 4 comprises the former Time Assurance Retirement Annuity with-profits fund.
With-Profits Sub Fund 6 comprises the former Hearts of Oak Friendly Society with-profits policies.
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For information on how NFU Mutual approach the management of their with-profits, including their current asset allocation mix and customer friendly documents on each product type please click here:
Please remember that any of our summary findings or conclusions are general; an appraisal of the general position for that company. There will be situations where an individual policyholder with a company that is ‘good’’ may want to look at surrendering or transferring their policy (for example to secure a guarantee or because it does not suit their risk position), likewise there will be situations where policyholders with a ‘poor’ company want to stick with what they have (for example because the penalty of exiting will be too great). Nothing can replace getting a report based on your unique circumstances; it is only this unique, personalised report which will provide the information that will instruct you on your circumstances regardless of the company and our general comments.