Chartered Insurance Institute  

CII says it is 'on road to financial recovery' with £3.28mn pre-tax profit

CII says it is 'on road to financial recovery' with £3.28mn pre-tax profit
 

The Chartered Insurance Institute has reported an operating surplus before tax of £3.28mn for 2021, compared with a deficit of £4mn in 2020.

In its financial statement, published today (May 13), the CII said the improvement was largely down to a £2.2mn increase in revenue from qualifications and educational activities over the year.

The institute reported consolidated operating income of £39.06mn in 2021, an increase of £2.11mn on the previous year when it was £36.95mn.

However, it still wrote a post-tax loss of £4.4mn, largely due to tax and a £6.6mn defined benefit pension cost.

The CII stated: "The institute is on the road to financial recovery thanks to the collective efforts of members, students, corporate customers, volunteers, trustees and staff resulting in increased revenue and reduced costs.

CII chairwoman Helen Phillips said: “This recovery in 2021 has been delivered thanks to the collective efforts of our community of members, students, corporate customers, volunteers, trustees and staff.

“Revenue has been achieved thanks to the continued commitment of insurance and personal finance professionals to learning, and their support and engagement with membership events.”

She added: “The progress achieved helps provide a sound base for the development of the CII’s next five-year strategy which will focus on continuing to rebuild post pandemic.”

The CII had increased its income from qualifications by £1.65mn due to more examination sittings in the year, some of which were done remotely.

It also said the meagre operating income in 2020 was due to the pandemic and restricted revenue generating.

However, over the past few years the CII has faced trouble with its exam processes and as recently as last week, was labelled “not fit for purpose” after an adviser was unable to sit an exam.

During the pandemic, the CII also apologised to candidates for “unacceptable instances” including problems with accessing remote invigilation sessions and technical issues during sittings.

Cost savings

Over the year, total operating cost was £35.78m, down from £40.85mn in 2020.

The CII said it had placed significant emphasis on cost control in the year. 

Most of the departments across the CII were able to reduce costs with the largest areas of cost reduction coming from staff costs (£1.91m), mainly through the slowing of recruitment, and property costs (£0.68mn), with the move from two offices to one hub in early 2021.

CII said £0.73mn was saved through the support of local institutes to receive a one-off reduction in local grants and IT running and event costs of £0.65mn.

All remaining departments and cost categories led to £1.2mn in net cost reduction. 

The institute said its decision to proceed with the buy-out of the defined benefit pension scheme also contributed to saving on costs, with the first step of this process completed in 2021 as an initial buy-in of £6.6mn.

By mid-2023, the CII hopes to be able to complete the pension buy-out, which will mean it will no longer have to allocate future operating surpluses to past financial debt.