Annual General Meeting 2009
Questions to the board
We asked our members who were unable to attend the AGM in person to send their questions to the board. Below are those questions and the response from the Group Board, or other senior employees where appropriate.
Question 1
SW writes "I wanted to bring to the Boards attention the lack of correspondence I receive throughout the year in connection with my Royal London With Profit Bond. The annual statement is much appreciated but I would also like more frequent progress reports on the value of the Bond."
Response from the Board:
Bonuses to the With Profits Bond are added once a year and these are reflected in the Annual Bonus statement. You may of course contact Royal London at any time to receive an up to date value for your investment (including any Final Bonus and Market Value Reductions that might be applying at that time).
Producing and mailing bonus statements is an expensive exercise and as the value remains stable between bonus declarations members would derive much benefit from more frequent statementing.
Question 2
GW writes on behalf of her mother, who has been a Royal London customer since 1951, and herself, who has been with Royal London for over 30 years. The both have policies where the premiums are paid and collected in cash.
"We have had quite a few new collectors over the years. Recently we changed to making payments every six months to make it easier for your collectors. When the collector was due in March no one came and, again, I had to ring Head Office to get a contact number for the collector. We have been advised that there is going to be a review of collectors and would like to ask the Board the question please can you notify the people like us, and I am sure there are quite a few, please, please can you advise us if the collectors are still going to visit on a monthly, quarterly or six monthly basis so we can get the books ready and not have to: 1) contact Head Office if no one calls; 2) or wait in.
Response supplied by: Mark Bowles, Head of Premium Operations
The Royal London is committed in offering home cash collection service to its policyholders.
One of the challenges we face however is the declining number of households that require a collection service. This affects both the number of collectors we require and the geographical implications in servicing these policies.
In May 2000, the Royal London ceased selling cash collected policies. At this time we had just over 1,000,000 households that required a collection service. This number now stands at 110,000 and continues to fall.
With the introduction of Direct Bank payments, many policyholders have elected to pay their premiums direct, whilst other policies have become subject to claims or have matured. In order to ensure we can deliver an effective and efficient service to our remaining policyholders, an annual review is undertaken to balance the volume of recourses required to service the reducing number of households.
Whilst this review regrettably, does cause some disruption and inconvenience, it has enabled us to maintain a collection service during a period when many others Insurers have withdrawn this facility.
The local collectors do however make every effort in advising their policyholders of the review to help minimise disruption. Collections are made on an 8 weekly basis, or less frequently if agreed by our policyholders (many payments are made quarterly/half yearly).
We can advise that a review has recently taken place, and changes will be made from June 2009.
Question 3
Member: NL asks
"1.Given the present financial crisis and the performance of the company, does the company have the attention of reviewing the bonus scheme for executive directors?"
"2.Who approves the bonus schemes for executive directors?"
Response from the Board:
The Remuneration Committee which consists of the Non Executive Directors of Royal London determines the remuneration of the Executive Directors. They receive independent advice on best practice and competitor remuneration from Kepler Associates.
The Remuneration Committee will review the remuneration of the Executive Directors in 2009. The review will take into account recent guidance from the industry regulator, the Financial Services Authority, on executive remuneration.