After recording a loss after tax of £143m in 2020, rural insurance company NFU Mutual was back making profit in 2021, its latest accounts show.
Pre-tax profit in 2021 was £220m, with overall profit after tax of £182m. In two of the last five years, NFU Mutual has recorded a loss, although in both 2017 and 2019 profits after tax exceeded £500m.
Set up by a group of farmers in 1910, the company now employs just over 4,000 people, with over 295 agency offices across the UK, including in NI.
During the years, the company has built up a significant asset base across the likes of financial investments and commercial property, and therefore retains an exceptionally strong balance sheet.
The opening of economies after COVID-19 lockdowns brought a resurgence of growth, with overall group funds rising from £20.8bn in 2020 to £22.2bn in 2021.
Income from investments were key to profit in 2021 as the general insurance business actually recorded a loss, despite £111m of new business being secured.
Gross written premium income was £1.82bn.However, after payouts, the underwriting loss stood at £89m.
Surge in claims
In his statement to accompany the accounts, NFU Mutual chair Jim McLaren said the loss on the general insurance business was due to the economic and inflationary effects of Brexit and COVID-19. There was also a surge of claims towards the end of 2021 related to Storm Arwen. In the years from 2017 to 2020, general insurance brought in profits of around £100m and above.
The accounts also show that NFU Mutual gave over £1m charities via its charitable trust and made “voluntary donations” to the UK farming unions of £7.78m.
With a large portfolio of business interests to manage, NFU Mutual is offering competitive, performance-related pay to its top executives.
The chief executive, Nick Turner, pocketed over £1m in salary in 2021, with financial director, Richard Morley receiving £738,000.
The NFU Mutual board, which met 11 times in 2021, is also well remunerated, with Jim McLaren (a former president of NFU Scotland), receiving total fees of nearly £200,000.
There are also six non-executive directors on the board, including UFU member Dr Christine Kennedy, each of whom received total fees in 2021 of over £70,000, and not including other expenses.