Annual General Meeting 2006
Speaker Highlights
Tim Melville-Ross
Chairman
Tim Melville-Ross welcomed members to the 145th Annual General Meeting of Royal London, the first since the year 2000 not to be presided over by Hubert Reid, who retired at the end of 2005.
Tim Melville-Ross then introduced his fellow Board members including two non-executive directors, Trevor Bish-Jones and David Williams, who have joined since the last AGM. He also singled out for particular thanks Fields Wicker-Miurin who had decided to stand down from the Board after the AGM.
The Chairman then explained the format of the meeting and the electronic voting procedures.
Purpose of Royal London
The Board never loses sight of the purpose of Royal London – to deliver value for members in terms of:
1. The financial worth of Royal London
Royal London is believed to be the first ever UK mutual life company to publish details of its profitability. Royal London's financial results reporting is now far more transparent, enabling direct comparison with publicly-quoted companies.
2. The returns achieved on policies, particularly with profits policies
Royal London has consistently topped the payout tables for With Profit policies as this table from the Money Management website shows.
| Company | Number of top ten appearances - 1997 to 2006 - maximum possible of 40 |
|---|---|
| Royal London | 35 |
| Wesleyan | 35 |
| Liverpool Victoria | 33 |
| Red Rose | 27 |
| Scottish Friendly | 26 |
| Ecclesiastical | 24 |
| NFU Mutual | 23 |
| Standard Life | 22 |
| Children's Mutual | 20 |
| Scottish Mutual | 15 |
| CIS | 13 |
| Britannic | 12 |
| Prudential (Scottish Amicable) | 11 |
| Scottish Equitable | 11 |
Mutuality
Royal London is recognised by many external commentators as a successful business, and this success has been achieved as a mutual company. After Standard Life's planned demutualisation Royal London will be the largest mutual life company in the UK.
The circumstances of Standard Life's demutualisation are very specific to that company. The Board of Royal London continues to believe that mutuality is in the best interests of our members and we have no plans to change our corporate structure.
Mike Yardley
Group Chief Executive
2005 Performance
2005 was a very successful year for the Group. Sales targets were exceeded and each of our brands saw strong growth. Our particular focus is on profitable new business growth, and we achieved this with new business up 12% to £243m – a record for the Group.
2005 new business
Scottish Life: up 16%
Bright Grey: up 25%
Scottish Life International: up 28%
RLAM new mandates: up 156%
Investment performance was particularly strong with most funds managed by rlam beating their benchmark. The main with profits fund saw growth of 17.4% in 2005 (1% ahead of benchmark).
All our businesses made profits in 2005 – £37m in total from the new business that was written in 2005.
Profitability – new business
Scottish Life: £14m
Bright Grey: £8m
Scottish Life International: £5m
Royal London: £10m
Total Value New Business: £37m
The success of 2005 has continued into 2006 with all business recording an increase in new business compared with the first quarter of 2005.
Q1 2006 – New Business
Scottish Life: up 16%
Bright Grey: up 14%
Scottish Life International: up 48%
RLAM new mandates: up 5%
Stephen Shone
Group Finance Director
Stephen Shone made a detailed presentation covering:
The profitability of Royal London's business
The financial strength of the Group
Royal London With Profits maturity values