In July, the Guardian reported that Co-operative Financial Services, the financial services arm of the Co-operative group, is to sell its £15bn life insurance fund and its Co-operative Asset Management arm to Royal London.
Some 125 years after selling its first life insurance product, CIS, now called CFS, is to pull out of the business and use French insurer Axa to provide its insurance products in future. 82 Co-op staff currently working in branches will move over to Axa. But the 670 employed in its “field-based advisory team” will lose their jobs.
A deeply concerned co-operator, Graham Bober, Vice-President of the East of England Co-op, wrote about this in the Co-operative News [August 2nd]:
“Deserting the insurance business appears odd, given that across the wider sector we are campaigning for the mutual/co-operative model as the preferred accountable democratic delivery of services – including financial institutions.
“Perhaps a more accountable and robust Group AGM is necessary; one that is accountable to members as owners of the business and not delegates from regional institutions.
“Perhaps the independent professions non-executive directors should be given a slice of the action? It seems to me that cc-operative insurance has more in common with the mutual sector as an ongoing ethos, and our model ought to have been used to “turn the world of the financial institutions upside down”.
He ended by posing a question:
“Is the Group the co-operative equivalent to News Corporation in our sector?
“Is its power and influence, and its decision making process truly accountable to a shareholding membership that has the governance and resolve to restrain its imperial ambitions?”
And making a statement:
Co-operation is idealistic realism in action.
COMMENT IN THE CO-OPERATIVE NEWS LETTERS SECTION:
Retired CIS official Chris Dry, sees this as a ‘sell-out’ of the three million policy holders, who chose and trusted co-operative products.
His proposal: the reserve funds – built with policy-holders’ money – should have been utilised. Instead £170m has been withdrawn by the CFS from the general reserve.
Mr Dry asks if the current staff of CFS are ‘truly co-operative’: “Do they possess the depth of experience and history that makes us no ordinary business?’
His message to us all:
“It’s right that all of our businesses focus on profit – but not profit at any costs. There must be times when we put our members/policy-holders and their values and principles first.”