In August this year, ICMIF member NFU Mutual (UK) revealed that it had shared a GBP 45.9m Mutual Investment Bonus with eligible With-Profits customers in 2022.

Mutual Investment Bonus is applied as an uplift to investments, representing a 1.25% increase in investments for 2022, and is in addition to the annual bonus provided to customers that receive one.

As a mutual with no shareholders, eligible customers who invest in the With-Profits fund benefit from the success of the fund and its financial strength, reflecting the current and expected economic conditions.

Thanks to NFU Mutual’s financial strength, almost GBP 170m has been added to investments of eligible With-Profits customers through Mutual Investment Bonus over the past five years.

There was further good news for With-Profits customers, as Mutual Investment Bonus was increased to 1.5% in 2023.

At the time of the announcement, Saurabh Agrawal, Head of With-Profits at NFU Mutual, said: “We’re delighted to share the benefits of our strong financial position with our eligible With-Profits customers through Mutual Investment Bonus.

“As a mutual without shareholders, we can share our success with our customers, whether they buy general insurance policies with us or invest in our With-Profits funds.

“Our customers typically stay with us for a long time, which means the long-term investment horizon of the With-Profits fund is appealing to many of them.

“The approach of smoothing can provide many investors with peace of mind in times of market volatility – and can help minimise the impact of adverse market movements to those withdrawing money.

“The With-Profits funds enable customers to invest in a variety of assets, including equities in companies based in both the UK and overseas, commercial property in the UK, and both corporate and government bonds.”

NFU Mutual offers With-Profits funds to its ISA, pension, and investment bond customers.

Mutual Investment Bonus is for eligible NFU Mutual customers who invest in the With-Profits fund. There are currently over 62,500 eligible policies.

NFU Mutual said its With-Profits fund has delivered strong returns over the past decade. The With-Profits Pension provided returns of 72.8% in the 10 years between the start of 2013 and end of 2022. The With-Profits ISA returned 70.7% over the same decade.

NFU Mutual says it is proud of its history of sharing its success with members, and also offers a separate Mutual Bonus to its General Insurance customers that provided savings of GBP 247m in 2022.

With-Profits is a long-term investment for those investing money for five years or more. NFU Mutual says returns on investments are smoothed out over time, allowing customers to reduce the impact of the peaks and troughs of volatile stock markets. Mutual Investment Bonus is an additional uplift given on top of this smoothing process.