NFU Mutual

In the 2021 report, there was a gender pay gap of 24.5% based on hourly wage (mean). The bonus gap is 50.9% (mean)[17] In 2018, the Treasury Select Committee chairwoman Nicky Morgan wrote to NFUM about its non-engagement with the Women in Finance Charter.[18] Following this intervention, the company signed the charter in October 2018.[19]

The company sold a large number of policies that covered business policyholders for various scenarios of business interruption running in to the beginning of the COVID-19 pandemic. This was litigated to some extent, though not exhaustively, in the FCA test case in 2020.[20]

From the onset of the pandemic, the NFU Mutual refused to meet any claims for COVID-19 related business interruption. It asserted that they were not obliged to pay under the terms of these policies. As early as March 2020 criticism of the business was growing in the press: "They have quite happily taken the premiums for the last 15 years but the one time I need it I'm not going to get any help off them ... It's disgusting that the insurance industry is [doing] this".[21] In April 2020, the integrity of the mutual's pretences not to owe these policyhilders were questioned in evidence to the House of Commons Treasury Select Committee:, with evidence that committee received and published stating:

[we now provide] evidence of how ... NFU Mutual, are viewing business interruption claims ... NFU have interpreted the appropriate clause in a way that is more restrictive than the policy wording and denied our claim ... it has been well publicised but the purpose of this ... is to give you a further example and evidence of how an insurance company seems to be ascribing its own intentions to a policy clause rather than following the wording [in the] policy.[22]

NFU Mutual had to reverse this position for some of its policies when, in April 2020, it "identified a discrepancy" and it became unsustainable to hold the position they had not sold policies that responded, and they were required to pay policyholders of that class.[23]

On the basis of this situation, The Observer identified NFU Mutual as one of the organisations offering the year's "worst customer service" after it refused to pay the owner of a holiday cottage for earnings lost due to COVID-19, despite them having cover that specifically mentioned losses due to infectious diseases.[24] By January 2021, aggrieved members were vocally condemning the business and signalling a coordinated response to the leadership of the business's management, with one stating: "[it's] completely soul destroying. NFU Mutual needs to stand up and help their customers".[25]

Following the handing down of the UK Supreme Court decision in the FCA test case members of the Mutual and their lawyers have come to the view that a proper construction of other policies the NFU Mutual had declined for two years was wrong in law,[26] and these policies should have responded and the NFU Mutual has been wrong to claim that they escape liability to pay claims.[27] Consequently, in January 2022, it was announced that a group action, headed by Penningtons Manches Cooper LLP, was underway to address this contended breach of contract. This action has recently received support for its analysis in Corbin & King v Axa, CL-2021-000235.

Each member of the group action would be, on success, entitled to up to £50,000 per policy,[28] and there are thought to be thousands of policies sold, suggesting the scale of this action could be very significant[29] with a lawyer involved saying: "We expect this represents only a very small number of potentially hundreds of NFUM policyholders possibly affected".[30] This contingent liability was not admitted in the accounts signed in 2020 or 2021, though the FCA Test case was before the court for some of this period, and the appropriateness of the executives and directors withholding explicit discussion of this exposure as potentially misleading was openly questoned in the AGMs for 2020 and 2021.[31]

Commenting on this situation an impacted policyholder said:

[i]n good faith, we paid our premiums to NFU Mutual for years to protect us ... we reached for the comfort and the security of the longstanding relationship with NFU Mutual and it turned to total ash.[32]

Discussing this situation in a Chartered Institute of Insurance podcast in May 2020, a director of the NFU Mutual, Nick Turner (at the time sales and agency director, and subsequently CEO) stated that:

Trust is important everywhere in insurance ... We have a product which is a promise essentially ... I have written little essays about this that so many have found helpful ... So many people's lives and businesses have been affected in tragic and possibly permanent ways [by failures of business interruption insurance to respond] ... If you haven't written a policy wording very precisely to protect the insurance company and bring clarity to the consumer, then that is where the problems lie ... We [will] have to work to renew trust with certain customers [who feel they have been let down], it will be challenging this is going to run and run ... if [the issues around policies we have sold have put policyholders] into incredibly difficult positions or even administration, nothing is going to put a smile on [their] face ...[33]

Turner added that he thought putting policyholders in this situation was likely to have harmed their welfare and mental health.[33]

In November 2020, following criticism in the press[34] and campaigning,[35][36] the ethics of the company's conduct in deducting COVID-19 support grants from its contractually obligated payments triggered by COVID-19 were called in to question in debate in the House of Commons between Ben Lake MP and John Glen MP as HM Treasury minister, with the minister stating:

I am aware that NFU Mutual has continued to make such deductions. As stated in my letter, these grants are intended to provide emergency support to businesses at this time of crisis, and it is the Government's firm expectation that they are not to be deducted from business interruption insurance claims. ... The FCA [Financial Conduct Authority] has also made it clear that it may intervene and take further actions where firms do not appear to be meeting the FCA's expectations and treating their customers fairly[37]

The NFU Mutual was required to reverse this position two months later.[38] A professional association of the impacted businesses commented on this situation on behalf of impacted business saying:

[this is] threatening our long-term sustainability, and taking taxpayers' money designed to keep us afloat. ... devastating. Many are now reluctant to make a claim, even though they are rightfully entitled, having paid their premium. We expect insurance companies to honour their contracts and not behave so poorly.[39]

In 2016, criticism in the press attached to the mutual over customers having claims rejected because of exclusions buried in the small print: "in some cases, policies would not pay out if you lost 'only' one limb, specifying that you must have had a double amputation to be deemed in a bad enough state a claim."[40]

The pay of senior executives out of mutual funds has attracted criticism. Most recently, concerns were renewed in 2019 at the £2 million pay of the CEO Lindsey Sinclair.[10][3] Prior to this the issue received negative attention in 2011, with the Insurance Times quoting an observer as saying: "Only two words come to mind – and they are 'snout' and 'trough'."[41]

In 2020, Ethical Consumer returned a "worst" verdict on NFU Mutual in a study examining it against environmental and carbon assessment criteria, including commitments to fossil-free investing, having targets in line with international climate agreements and visible public policies that report on emissions from investments, and further criticized them for "just talking about the climate impact of their offices" rather than the far more significant impact of their investments.[42] Two years later they announced a carbon reduction strategy.[43]

In 2011, an employee of NFU Mutual insurance, Gordon Murray, was jailed for a £400,000 fraud.[44][45] In 2018, Iain Wishlade, an NFU Mutual employee was also jailed for a £129,000 fraud.[46][47]

In 2017 a Cardiff based veterinary surgeon engaged in making fraudulent claims concerning her horse and was struck off from her professional register.[48][49] In 2019 a member of the NFU Mutual was jailed for 20 years following a fraud in which they had arranged an explosion which injured 81 people.[50]

In February 2022, a former member of the mutual stated in public that the Financial Ombudsman Service had confirmed that, in Spring 2021, then Chief Executive had expelled him and his family for raising issues of experience of disability discrimination from the NFU Mutual. That former member added that the output of this discrimination which included making files in a hostile fashion, was that they were unable to buy any other insurance fairly and experienced a £14,000 fine for having a disability and asking the mutual to treat them fairly.[51]

In 2018, adverse comments about policies of discrimination against some customers were made.[52]

In 2016 NFU Mutual sought to force 56 year old Miss Govina to pay a £128,000 bill for damage to a cottage from a water burst, even though she was covered by an insurance policy. The NFU Mutual lost this case in court and was also ordered by Mr Justice Holgate to pay a £100,000 legal costs bill on top of the costs of the damage.[53]

In 2019, errors by NFU Mutual, in failing to properly record insurance a customer had taken out, resulted in a customer having a £200,000 car seized and their customer facing criminal charges.[54]

Around the year 2000, a number of attempts were made to privatise the NFU Mutual.[55][56]

Former NFU Mutual director John Murray[57] initially approached the five venture capitalists in the hope of launching a bid. One of the reasons this was advanced the opinion that the company was "eroding its value by selling insurance to non-farming customers at knockdown rates"; at the time, windfalls for members of between £20,000 and £25,000 were anticipated.[58]

Commenting to the House of Commons Treasury Select Committee[59] on the possibility of demutualisation, Andrew Young, the then managing director said:

In our view, members of a mutual should ... decide how the business is run, and if they are not satisfied they should get rid of the Board and the management rather than demutualise ... current governance mechanisms give ample opportunity to do that.

In 2021, NFU Mutual bought a shed near Milnrow for £27 million,[60] it also committed to spending £100 million on 6 sheds near Clowes.[61]

Also in 2021, NFU Mutual's plans to develop a giant warehouse 14 metres from one residential properties in Witney, with trucks coming and going at all times of night were branded "completely unacceptable" by residents and attracted over 190 objections.[62][63] Nevertheless, in April 2022 NFU Mutual's management allocated in excess of a further £20 million of members' funds to this speculative investment with its commercial partner Tungsten.[64][65]

In March 2022 plans were announced to build a speculative shed in Staffordshire.[66] In April, 2022, a shed was traded with Valor for £50 million.[67]

In 2010, the NFU Mutual brought an action in the High Court, making a claim against HSBC. In the case, (The National Farmers Union Mutual Insurance Society Limited v HSBC Insurance (UK) Limited [2010] EWHC 773 (Comm)) the NFU Mutual had sought to require HSBC to pay a contribution to the more than £1.8 costs of fire damage to a property that NFU Mutual was insuring for a purchaser after the exchange of contracts. The NFU Mutual lost the case.[77]

In Smith (Leah) v National Farmers Union Mutual Insurance Society Limited and Robinsons Services Limited [2019] NIQB 37, the company sought to deny liability for an accident sustained in the course of an employee's attendance at work, but the court found against the company.[78]