Norfolk farmers praised for supporting farm safety campaign
11:53 01 December 2012
By MICHAEL POLLITT
East Anglia’s farmers have been praised for supporting initiatives to reduce accidents in the agricultural industry, said the leader of the country’s biggest rural insurer.
Richard Percy, chairman of the NFU Mutual, told members at the annual meeting of Norfolk Farmers’ Union that farming was the “most unsafe industry in the United Kingdom.”
He said that the take-up of the insurance giant’s risk manager service in Norfolk and Suffolk had been very good and was significantly higher than in other parts of the country.
“We send out experts to look at the risk on farms, farming businesses and other businesses that we insure. It is an excellent service, we charge for it but we don’t charge the full cost,” he said.
“It is fair to say that over here in larger farming areas, Norfolk and Suffolk, that the take-up of our risk management services has been very good.”
Hertfordshire farmer, Mr Percy, said: “Agricultural accidents cause the break-up of families, enormous distress and ruins businesses.”
“By understanding some of the potential risks we present to ourselves while working on farms, we could go a long way to reducing the pain and injury that happens around agricultural accidents,” he added.
Mr Percy described the NFU Mutual, which had £1.25bn in premium income and £12.5bn in fund management, as “perhaps the biggest farming success in terms of a mutual organisation”.
It was founded in 1910 by Warwickshire farmers, who could not insure corn ricks and haystacks near a railway line. In the first year, the seven-strong founders had premium income of £320 and made an underwriting profit of £16.
As the junior to the National Farmers’ Union, which was founded two years earlier, it decided from 1914 that only NFU members would be insured. The decision to rely on self-employed tied agents as NFU group secretaries, from the 1920s, had been part of the reason for mutual success of both organisations.
And, a network of local directors in every county, currently west Norfolk farmer Bob Young, of Hockwold, was a further “eye and ear on the ground,” said Mr Percy.
The NFU Mutual, which had forged linked with NFU Scotland in the 1920s and the Ulster Farmers’ Union by 1930, provided significant financial support for its elder cousin. “We support the NFU of England and Wales, NFU Scotland and Ulster Farmers’ Union. This year, we gave £6m to those organisations, including £5m to England and Wales, based on premium income.
“We believe that agriculture is at the core of the rural economy and since we’re the UK’s principal rural insurer, we want an organisation that can lobby for the industry in Westminster, in Brussels. We recognise that the unions need the finances to do that work.”
The Mutual enjoyed remarkable support, for example by 1997, it insured 90pc of farmers in Northern Ireland. In that year, it made the radical decision to expand business outside the farming sector. “In 1997 we changed our articles to insure people who were not members of the NFU.”
It was now the UK’s premier rural insurer. “We’re interested in the market towns, the villages and rural businesses of the whole of the UK,” he added.
A network of more than 300 agents gave a personal, local service. “It is a system which has worked well and it is a system that we intend to stay with. We have no intention at all of moving away from the tied agency system because that local professional personal service is what makes the NFU Mutual special.”
“We will stay as a Mutual. There’s absolutely no intention to move away from mutuality,” he added.
It was a matter of regret that other mutuals including Bradford & Bingley, Alliance & Leicester, Abbey Life were owned by Santander. “Those mutuals that were providing a fantastic service and premier organisations are now hangers-on of subsidiaries of a Spanish bank,” he said.
Mr Percy, who farmed close to the highest point in East Anglia at 551ft, said that the Mutual had one of the best claim and expense ratios in the industry, with a combined operating ratio of 98pc.
He was critical of “no frill” insurers and especially of those companies, which offered incentives including 50pc discounts to new customers.
“We will never do that as a Mutual. We give them a share in the profits we make if they’re loyal to us. That’s a complete reversal to the industry.
“The rest of the industry expects the good loyal customer to pay for a new customer to get a 50pc discount. We won’t do that,” he added.
Mr Percy also criticised hints that government might add a new hypothecated tax on top of the insurance premium tax to create a reinsurance fund to protect flood risks.
He said that politicians also had to sort out the rising costs of the “no-win, no-fee” mess.
“They got us into this mess and they’ve got to get us out of it,” he added.
And he described the EU policy, which will increase costs for young female car drivers and reduce annuity payments for women as “crackers.”