2007Annual General Meeting 2007
The Royal London Annual General Meeting 2007 was held at The Barbican in central London on 22 May 2007.
As with last year's AGM, members not attending the meeting in person could make their views known by registering a proxy vote. In addition, members were also able to vote online for the first time.
Approximately 35,000 Royal London members chose to vote.
A number of members attended the meeting in person and took the opportunity to question the Board both formally, in the Question & Answer section of the meeting, and informally over a buffet lunch.
The proxy voting process and entry to the meeting on the day was managed by the independent scrutineers, Electoral Reform Services (ERS). To ensure that the votes of members present and the proxies were accurately reflected, ERS provided electronic voting consoles for voting at the meeting.
Results of voting at Royal London's Annual General meeting on 22 May 2007.
| Resolution | For | Against | Abstain | % For |
|---|---|---|---|---|
| The audited Annual Report and Accounts for the year ended 31 December 2006 be received. |
31,310 | 414 | 764 | 98.7 |
| The Directors' remuneration report be approved. |
29,971 | 1,439 | 1,078 | 95.4 |
| To reappoint PricewaterhouseCoopers LLP as auditors. |
31,256 | 624 | 607 | 98.0 |
| The remuneration of PricewaterhouseCoopers LLP be determined by the directors. |
30,378 | 1,074 | 1,032 | 96.6 |
| That Andy Carter be reappointed a Director. |
30,880 | 818 | 791 | 97.4 |
| That John Deane be reappointed a Director. |
30,772 | 880 | 839 | 97.2 |
| That Robert Jeens be reappointed a Director. | 30,726 | 943 | 822 | 97.0 |
All the resolutions were carried.
Highlights of the 2007 Royal London AGM
Tim Melville-Ross, Chairman
Tim Melville-Ross welcomed members to the 146th Annual General Meeting of Royal London. He then introduced the fellow members of the board, including Andy Carter who joined the board from January 2007 and John Deane who joined in April 2007.
He then explained the format of the meeting and the process of electronic voting.
Corporate Governance and Mutuality
Tim highlighted that Corporate Governance is something Royal London has taken very seriously for many years. As the largest mutual insurer in the UK, Royal London is – in some respects at least – a role model for other companies. Royal London aims to demonstrate in the highest standards of corporate governance.
Tim stated that the Board believes mutuality continues to be in the best interests of the members and confirmed there is no need to, and no plans to, change the corporate structure.
Mike Yardley, Group Chief Executive
Mike took the opportunity to highlight the key areas of success for Royal London and our businesses from 2006.
- Pre-tax profits increased by one third to £431 million.
- The embedded value of Royal London increased during 2006 from £1.6 billion to £2 billion.
- The present value of the new life and pensions premiums written by the Group in 2006 increased by over 10% to more than £2 billion.
Mike commented that each of the five businesses within Royal London Group contributed to making last year such a success for the Group. Sales targets were exceeded, with strong growth from each of the brands.
Business Highlights:
- RLAM, our specialist asset management company, had a terrific year in terms of new business secured, with an increase of 64% above what had been a pretty successful 2005.
- Bright Grey also enjoyed a successful year in 2006, with increased business volumes and an increased share of the protection market.
- Scottish Life delivered an 8% increase in the value of new business written; a very satisfactory result given that the market continues to be highly competitive.
- Scottish Life International increased its new business by 25% in 2006 with particularly strong performance in the German market.
- Royal London Administration Services has invested in technology so as to further improve service quality and cost-effectiveness.
Stephen Shone, Group Finance Director
Stephen looked at the profitability of new business in 2006 and how it contributed to improved financial strength.
He also demonstrated how investment performance has provided excellent returns for with-profits policyholders. This has lead to maturity values on long term with-profits policies being amongst the best of the major UK life companies.
Protection business, Bright Grey, and international business written by Scottish Life International are generally higher margin and so contribute proportionately more to new business profitability.
Scottish Life works in a particularly difficult market, particularly from group pensions, although our actions are already improving new business profitability.
In Royal London Administration Services new business largely consists of additional premium income on existing business that has low up front expenses.
Royal London Asset Management profits were generated through winning £1.2 billion of new investment mandates.
The total Group profit in 2006 was £431m before tax.
During 2006 the Royal London with-profits fund returned a very healthy 11%. This outperformance above benchmark has added £120m to policyholder funds.
Stephen summarised that Royal London's with-profits policyholders have continued to enjoy some of the highest maturity values of all the major life companies in the UK.
Royal London has a strong balance sheet which provides the flexibility to continue investing in the Group to enable excellent returns for you, our members.
David Williams, Chairman of Remuneration Committee
David gave a brief summary of the Royal London Remuneration Committee Report, which is set out in full on pages 41 to 43 inclusive of the Annual Report. A summary of the Committee's report is also included on pages 14 and 15 of the Summary Financial Statement.
Running a financial services group of the size and complexity of Royal London requires high quality, experienced senior management. To attract and retain the right calibre of management a competitive remuneration package must be offered, including rewards for achieving challenging targets. These targets are focused on the key performance areas for the business. In other words, the management team's rewards, both short and long term, are closely aligned with Royal London's business performance and hence the interests of our members.
The Committee believes the rewards set out in the report are entirely appropriate, given the contribution and performance of the senior executive team in driving the consistent and very significant performance achieved by Royal London over a period of several years.
Tim Melville-Ross, Chairman
Royal Liver
Royal London Group made an announcement on 30 April to say they had approached the Royal Liver Assurance Company to discuss the combining of the two companies.
These negotiations are still at an early stage, and Royal London is not yet in a position to provide any conclusions.
As stated in the announcement on 30 April, it is possible that no agreement will be reached. The basis on which the agreement will be reached is complex but the board will ensure a decision is made which is in the best interests of our members.
Members will, of course, be kept informed on the outcome of these considerations.