NFU Announces Up To 10% Mutual Bonus Scheme

by Stewart Douglas

Story link: NFU Announces Up To 10% Mutual Bonus Scheme

Insurer NFU Mutual has today announced that its Mutual Bonus scheme will be returning a dividend of up to 10% of premiums to customers over the course of 2008, despite widespread flooding and substantial payments made out over the course of last year.

The mutual has announced that renewing customers will be entitled to a return on their premiums, variable according to their loyalty with NFU Mutual and the time they’ve spent insured with the group. In practical terms this could equate to up to £100, despite one of the most costly natural events in recent years in the form of the summer flooding.

With flood damages over the summer costing an estimated £112 million, it was thought that this may prevent the industry from handing back sums to its policyholders to the same extent. However with the reports from NFU that policyholders will be entitled to reimbursement, it appears that the worst of the situation may be over and that certain sectors of the industry may have recovered well.

“Although last year was the worst for flooding claims in our 98-year history, our underlying financial strength means we can continue return money to loyal customers through Mutual Bonus discounts,” said NFU chief executive Ian Geden.

“Mutual Bonus is a real benefit of our mutual status for policyholders. Everyone who renews a general insurance policy can benefit – saving someone with a £600 car insurance premium and a £400 home and contents premium a total of £100 if they have insured with NFU Mutual for five years or more.”

As a result of its mutual status, NFU doesn’t have shareholders and instead returns profits to its policy holders as part of its customer value proposition.