The boards of Brighton-based OneFamily and Glasgow-based Scottish Friendly on Wednesday announce proposals to merge, bringing together the two mutual life assurance providers to create one of the UK’s largest mutuals.

John McGuigan, chair of Scottish Friendly, will chair the combined organisation, while Jim Islam, CEO of OneFamily, will be the future CEO.

The combined mutual will operate under the group name of OneFamily and the Scottish Friendly brand will remain as part of a multi-brand group alongside the OneFamily and Beagle Street brands. There will be no “immediate impact” on staff.

The combined mutual will have almost £10 billion assets under management and serve over 2.3 million members across the UK.

The merger is expected to be effective from early 2027. The proposal will be subject to all necessary approvals, including regulatory approval.

With commitment to a base in both Brighton and Glasgow, the combined organisation will bring together the strengths of both organisations and build on their mutual values and heritage.

Scottish Friendly chair John McGuigan said: “This is a powerful opportunity to build long-term value for our members. Joining together with OneFamily will create a strong and future-focused mutual life assurer that will be one of the largest in the UK. It’s an important new chapter that builds on our successful heritage and sets a pathway for sustainable growth.

“Our organisations have a great deal in common, and we share pride in our mutual values. By combining, we will benefit from increased scale that will enable us to maximise our potential and make a difference in the market.

“Our shared values, our members and our colleagues will be at the heart of our thinking as we shape our future plans together.”

OneFamily chair Steve Colsell said: “Both our boards recognise the significant opportunity that this presents for us to accelerate the development of our mutual proposition.

“OneFamily has taken some bold steps to progress in recent years, investing in technology and modernisation, and extending the range of products we can offer customers.

“Joining together with Scottish Friendly is the next step forwards on that journey. We are delighted to have reached this agreement together and are excited to see our plans take shape.”

OneFamily CEO Jim Islam said: “Bringing together these two successful mutuals is an exciting prospect. I am inspired by the potential to pool our strengths and capabilities. Together we will offer a comprehensive investment and protection platform that will support today’s families as they build their financial futures.

“This is an important moment to build a stronger and more sustainable mutual. There is a great deal of commitment from the UK and Scottish Governments in encouraging the growth of the mutual sector, and we see many consumers choosing purpose-led organisations that focus on creating value for members. That’s what sets mutuals apart. Our proposal will mean we will be better placed to maximise this opportunity.”

Scottish Friendly CEO Stephen McGee said: “A merger with OneFamily joins two organisations built on common values, organisations that put customers at the heart of everything we do and who care deeply about their colleagues and their communities.

“By combining and leveraging our respective strengths, we can build on what we have already achieved and accelerate the delivery of our vision.

“Together, we have a significant opportunity to create even greater value for our members, both today and in the future.”

OneFamily formed from a merger of Family Investments and Engage Mutual in 2014. It employs around 400 colleagues mainly in its Brighton office.

OneFamily has around 1.5 million members and £5.7 billion assets under management. It offers a range of investment and protection products. In 2022, it acquired Beagle Street, which offers a range of protection products such as life assurance and critical illness cover direct to customers and via financial advisers.

Scottish Friendly was founded in Glasgow in 1862 as the City of Glasgow Friendly Society and it now employs around 350 staff in its Glasgow office.

Scottish Friendly has over 850,000 members across the UK and £4.2 billion in assets under management.