Merger will be based in Glasgow

Scottish Friendly to double in size after biggest ever acquisition

fiona mcbainScottish Friendly, Scotland’s largest financial mutual, is acquiring Marine & General Mutual (M&GM) – the oldest active registered company in the UK.

The two mutual organisations expect the transaction to complete in the second quarter of this year, subject to approval from members, regulators and the High Court.

The deal will be the largest takeover by Glasgow-based Scottish Friendly to date and will double its assets to around £2 billion.

Fiona McBain, chief executive, Scottish Friendly said: “This announcement is a tangible outcome of our strategy to diversify and grow the Scottish Friendly Group.

“The overall efficiency of Scottish Friendly’s business has resulted in our ability to competitively tender to take over existing financial services companies and run them more effectively and more efficiently.

“We are particularly proud of having secured the opportunity to double in size. The takeover of M&GM will give us additional economies of scale that can drive further efficiencies and increased value to all of our policyholders, including those transferring from M&GM.”

David Gulland, chief executive, M&GM said: “As we explained to our policyholders and members in our strategic report for 2013, we have been seeking to secure the long-term future of our customers through a transfer to another organisation.

“This involved a thorough process considering a number of potential operations and we were delighted to select Scottish Friendly.

“We were particularly impressed by the group’s efficiency, customer focus and experience in this field. We welcome the fact that all M&GM policyholders will become members of Scottish Friendly as part of this deal.”

Scottish Friendly can trace its roots to 1862. Established as the City of Glasgow Friendly Society, its name changed in October 1992 when it took over Scottish Friendly Assurance.

In recent years Scottish Friendly has significantly restructured its business. The group has flourished through a three-part growth strategy of organic growth, mergers and acquisitions, and business process outsourcing.

Its biggest acquisition to date was the Scottish Legal Life takeover in October 2007, at that time the UK’s largest friendly society. More than 500,000 policies and £170 million of assets moved to Scottish Friendly.

Other takeovers have included Rational Shelley, Preston Operative, a book of life business from Pioneer, London, Aberdeen and Northern Mutual Assurance Society (LANMAS), and Royal Standard.

In 2006, the group won the contract to provide the back office and logistical support to the Edinburgh-based Nucleus Financial Group wrap. In 2008, Scottish Friendly was selected to provide the back office support to the Aviva SIPP and wrap contracts.

Scottish Friendly sold its wrap administration business to Citi in 2011. It announced a series of new partnerships in 2012 in the life protection market. With high profile distributors such as Hollard Life and BGL Group, Scottish Friendly launched into a new line of products and another new customer base under brand names such as Smart Insurance, British Seniors, Sorted and Beagle Street.

By 2014, the Group had added distribution for Sun Life Direct (for protection and ISA products), Group Life Assurance with the newly branded Havensrock (from Punter Southall) and was distributing in the Republic of Ireland through

Marine & General Mutual is Britain’s longest-registered company and holds the company registration number 00000006 (companies 1-5 no longer exist).

It was founded in 1852 as the UK Temperance & General Provident Association at a time when seamen were charged more for life assurance if they were teetotal (because insurance companies considered water to be dangerous and unsanitary).

The organisation championed longevity due to abstaining from alcohol on a sea voyage, resulting in reduction of premiums and a successful foray into the assurance market.

Reinvented in 2008 as MGM Advantage with a focus on the retirement income market, its sales grew significantly over the next few years. In 2013 the Society completed a transaction in which it closed to new business, sold its infrastructure to a new company established by private equity, and adopted the Marine & General Mutual brand.

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