Annual General Meeting 2005
Speaker Highlights
Hubert Reid
Chairman
Hubert Reid opened the meeting by welcoming members and explaining the voting procedures. An independent company, Electoral Reform Services has overseen the proxy voting and the electronic voting process today.
Corporate Governance
December 2004 saw the publication of the Myners Report on governance in financial mutuals.
We welcome the report and its recommendations, many of which are already in place at Royal London – including fair and accessible voting rights for members.
Good corporate governance is important for the effective management of any business – mutual or plc. Good governance is founded on good communication with members and policyholders. Royal London is determined to lead the way in this respect.
Mike Yardley
Group Chief Executive
With Profits Performance
Across the industry with profits bonuses and payout have been falling for several years. Royal London’s with profit fund produced a return of 12% in 2004. This positive performance was nowhere near enough to compensate for the steep market falls of 1999 to 2003. Royal London payouts continue to exceed the underlying returns the investment portfolio has earned.
A 25-year with profits policy has achieved an annual yield of 9.9%.
New Business
Royal London increased market share in a number of key market sectors in 2004.
New life & pensions business in 2004 was £216 m – up 7% on 2003.
Scottish Life’s pension business grew by 7% to £160 million.
Bright Grey, the Groups specialist protection business, contributed £18.5 of new business to secure nearly 5% of the IFA market.
There has been a very positive start to 2005 with life and pension business up 20% on the equivalent period in 2004.
Financial Strength
Only by being financially strong can Royal London be flexible enough to invest to achieve the best returns for policyholders.
On both a statutory valuation and the new realistic valuation basis, Royal London is financially strong. Excess assets over liabilities, on a realistic basis went from £865 million at the end of 2003 to £1.1 billion at the end of 2004 – a rise of 20%.
Our purpose – and reason for being – continues to be focussed on delivering enhanced value to the Royal London Group and to its members.
Hubert Reid announced his intention to step down as Chairman at the end of the year. Mike Yardley thanked Hubert Reid for his support and commitment over the past 9 years - the last 6 of which he has been Chairman of Royal London.
More in-depth extracts from the presentations by Hubert Reid and Mike Yardley can be found here.