The society’s assets under management climbed to £4.4 billion, supported by positive market returns and net premium flows, while member distributions reached £23m, including £4.9m through the ProfitShare scheme. The mutual’s Solvency II Pillar 1 capital ratio was at 197% – well above regulatory requirements.

Scottish Financial News spoke with Scottish Friendly CEO Stephen McGee, who noted that this growth was the result of a “conscious decision to try and grow our own-brand business”, adding that the society is increasingly “targeting the family unit” and appealing to grandparents who wish to invest for their grandchildren’s futures.

A significant driver for this momentum has been the security offered by the society’s with-profits fund.

Mr McGee explained that the fund resonates with customers because of a “certainty and that guarantee over the long term that you won’t lose money”, which he says allows people to “actually invest in equities” even during periods of market volatility. Still, he remains cautious about the impact of persistent economic volatility driven by geopolitical tensions, stating that “if oil prices stay above that hundred-dollar mark, there’s going to be quite significant inflation”.

While the number of customers wanting to do business with the society remains “very resilient”, he warned that an “inflationary squeeze” could ultimately limit how much individual members are able to invest.

Looking toward the society’s structural future, Scottish Friendly is currently navigating a £2.16bn pension book acquisition from Fidelity International, expected to complete in September 2026, and a proposed merger with OneFamily.

Mr McGee hopes that joining with OneFamily will create “material advantages” through a complementary product set. He emphasised that the move is not being undertaken for “efficiency purposes”, but rather for the benefits of scale.

“With a bigger organisation, you do have the capacity for more investment,” he continued, explaining that a larger entity can more easily absorb the costs of mandatory regulatory updates like the pensions dashboard, allowing for more capital to be directed toward “better products or services”.

The merger is expected to position the combined entity as the UK’s third largest mutual insurer.

Regarding the UK government’s stated ambition to double the size of the mutual sector, Mr McGee welcomed the sentiment but remained focused on performance.

“We don’t get a badge of honour because the government likes us,” he said. “We have to demonstrate we’re doing the right thing for our customers and our members.”

He further suggested that the enlarged society could potentially seek out larger consolidation opportunities in the future, stating he “would not be surprised if there wasn’t another opportunity bigger than both of those things” on the horizon.

In terms of future product development, Mr McGee said the mutual wants to focus on “simple products”, and creating more of them. He highlighted the transition from JISAs to Lifetime ISAs as a key area for growth, noting that providing young adults with a clear reason to keep saving is a “really good journey”.

In terms of integrating AI and automation, Mr McGee shared that the society is investing in these areas, but remains committed to a personal service model for the front office, saying that “our customer base appreciate being able to speak to someone on the phone when they need to”, while making sure that “when they can do it themselves” they have that option.

He added that some of the benefits of investing in AI and automation will be seen “post-merger because the One Family business has invested a lot in that back office technology”, whilst still “retaining that personal touch”.