The Co-operative Insurance
The Co-operative Insurance can be traced to the founding of the Co-operative Movement by a group of factory workers in Rochdale in 1844 who shared the profits of a shop they owned.
As the Co-operative idea developed and more societies opened shops, it became clear that their insurance arrangements were inadequate - some were not insured at all. This was more apparent when a Co-operative store in Tenby, South Wales was destroyed by fire. It was not insured, so an appeal for funds had to be made to other societies.
As a result of this and other losses an insurance company was formed to provide fire insurance for the various Co-operative societies. The Co-operative Insurance Company Limited was registered on 29th August 1867. In those early years the name included the word ‘Company’ rather than ‘Society.’
No-one had any experience of how to run a fire insurance company and the Board decided to use the rating system of the Western Insurance Company to whom they paid a fee of one guinea.
In 1868 the first item of fire insurance came, when the North of England Wholesale Society had its stock-in-trade insured for £1,000, but it was not until August 1869 that the first claim was made.
The first year’s premium income was about £200 and in the first seven years of business only £330 was needed to meet claims.
In 1869 the company expanded its business into Fidelity Guarantee insurance. There was not the same rigid control of accounts as there is today and it was fairly easy for a clever person to defraud companies of money. Fidelity Guarantee insurance guaranteed a company reimbursement if there was such a loss of funds.
In July 1871 the Head Office moved from its premises in Rochdale to Manchester where it has remained ever since. The first General Manager, James Odgers, was appointed in 1876 at an annual salary of £150 and a few months later the Head office moved to City Buildings, Corporation Street, Manchester.
In 1880 the Company joined the Fire Offices' Committee and took advantage of its system of rating insurance. This provided more security for its members but meant that the Company could no longer make any return of profits to the retail societies insured with them. This was overcome by allowing them to be their own agents and so to receive commission on the premiums they paid for insurance.
Until the mid 1880s the company only offered Fire and Fidelity Guarantee insurance but in February 1886 at an Annual General Meeting they resolved ‘...that Life Assurance be undertaken by the Company, and that the shareholders forfeit any rights they may have to the profits of the Life Department and agree that they shall belong exclusively to the Policyholders.’ Local societies were urged to provide facilities for the payment of premiums out of dividends and, by the end of 1886, 28 life policies had been issued and the total sum assured was £2,350.
The funds resulting from this life business had to be invested and the Board favoured Railway Guarantee stock and Local Authority mortgage loans. In 1899 Industrial Life Business was also introduced and the Company was converted into an Industrial and Provident Society. The amended rules were registered on 11th March and since then the Company has been called the Co-operative Insurance Society Limited. Other classes of business were provided for the general public and not just for Co-operative societies and their members.
It was in 1902 that the first female clerk was employed at the Bradford Office and in 1903 at Chief Office at a salary of twelve shillings per week (60p). By 1908 a new Chief Office had been built at 109 Corporation Street, Manchester. There were 26 clerks in the Fire Department, 20 in Life, seven in Accident, seven in Accounts, two in Agency and 15 Branch Office clerks. The average weekly wage for a clerk was one pound and 14 shillings (£1.70). By 1912 there were offices in Glasgow, Edinburgh, Bradford, Newcastle, London and Dublin.
In 1909 the society ended its membership of the Fire Offices' Committee and Accident Offices' Association and became a non-tariff insurer. It now decided its own rates for fire and accident business and was able to distribute the profits to Co-operative societies.
In June 1913 the shares of the society were taken over by the Co-operative Wholesale Society and the Scottish Co-operative Wholesale Society, and today CWS and its Directors are still the Society’s only shareholders. We often hear today of mergers taking place between larger insurance companies but few people realise that The Co-operative Insurance has been involved in a takeover. In 1905 several men prominent in the Labour Party in Birmingham established the Planet Friendly Assurance Collecting Society mainly to deal with life business. By 1916 its sickness fund had a large deficit and they approached the Co-operative Insurance Society to take over their business. The Planet was dissolved and its assets and liabilities transferred to The Co-operative Insurance Society.
The advantage of this takeover was that the Planet employed about 400 agents, and had over 40 District Offices. In fact, their sales staff was greater than that of the Society and so the Society decided to concentrate more on Industrial Life insurance and opened several more District Offices.
There was another takeover in 1922 when a small collecting society, the British Metal Trades and General Assurance Collecting Society had its business transferred to The Co-operative Insurance Society. Business generally began to increase during the 1920s, creating a separate Motor Department and by 1930 the motor income exceeded £500,000 per annum. As the Society grew, so did the number of staff needed to deal with the increase in work. The Chief Office at 109 Corporation Street was unable to house them and various departments were scattered in ten buildings in Manchester. So in August 1962 a new building was opened at Miller Street, not more than a hundred yards from the Society's old Chief Office. This imposing building now houses approximately 2500 staff.
In the mid 1960s computerisation came to The Co-operative Insurance and Data Processing Department was established. The title of this department was changed in 1990 to the ‘Information Services Department.’
In 1990, The CIS launched Environ, its first socially responsible investment (SRI) fund. Because of The Co-operative Insurance’ Co-operative values, it was seen as a natural provider for SRI and in 1999 The CIS began a Responsible Shareholding programme, whereby it began to improve the behaviour of companies in which it invests on social, environmental and ethical matters. Then in 2000 The Co-operative Insurance launched its first corporate social responsibility report (CSR) named the Social Accountability report. Many awards were to follow.
In 2002, The Co-operative Insurance become the first institutional investor to put its entire UK voting record on the Internet. Later in 2002, Co-operative Financial Services Ltd (CFS) was formed, bringing together The Co-operative Bank and Co-operative Insurance Society (CIS) under ‘common strategic leadership’.
Leading the way on environmental matters, The Co-operative Insurance created the UK's largest inner city wind farm in 2005 on one of its head office buildings in Manchester. This was quickly followed by the unveiling of Europe's largest vertical array of solar panels on its 400ft Chief Office building.
In 2006, The Co-operative Insurance became the UK’s first insurer to launch an Eco-Motor Insurance policy which provides discounts for ‘greener’ cars. The policy offsets the environmental impact of the customer’s driving and has ethical considerations throughout the entire claims process.
In 2011 The Co-operative Financial services rebrand as The Co-operative Banking Group, incorporating The Co-operative Insurance.
