Our 2025 AGM

[Isabel Hudson]

Good morning, everyone. My name is Isabel Hudson. I'm the new Chair of Royal London, so go easy on me today, please. I'm still in my honeymoon period.  

I'm very happy to welcome you to your 2025 Annual General Meeting of the Royal London Mutual Insurance Society. We appreciate you taking the time to join us this morning.  This is, of course, my first AGM since joining in February, and I'm looking forward to working with the Board and our wider management team as we continue to put members' interests first, and I'm especially looking forward to hearing your views today.  

For those of you in the room, we'd like to invite you to join us for light refreshments after the meeting.  

For those members who are joining the AGM online, if you experience any technical challenges, there is guidance available via the 'Help' link, or you can submit a query to our technical support team via the 'Q&A' tab. Hope you're able to find that.  

You will also be able to vote online in due course. 

But first, to confirm, there are no fire alarms planned for today, so if the fire alarm sounds, please follow the Royal London team who are placed around the room, and they will guide you to the nearest fire exit. 

Before we start with the formal presentations, I'd like to take a few minutes to introduce your Directors, who are all here today, and outline their key committee memberships.

Starting on my far right-, whoops, we-, we have Kal, who is a member of the Investment Committee. Next to Cal is Dan. So, I was told I had to call him Daniel, but he apparently thinks somebody was just trying to wind me up. So, it's Dan. Dan is our group CFO, and next is Ruth.  Ruth is a member of the Remuneration Committee, and then we have Jane, who chairs the Remuneration Committee, so you can buttonhole her on all the questions about REM during the lunch break, and she's also a member of the Risk and Capital Committee.  Next we have Eithne who chairs the With Profits Committee and is also member of the Audit Committee and the Risk and Capital Committee.  Next to Eithne is Barry, right behind me. Barry, of course, is our Group CEO, and you'll hear more from him shortly.

We then have Pars, on my left here, who's chair of Royal London Asset Management, and is a member of the Audit Committee.  Next to him is Mark, who is Chair of the Risk and Capital Committee. Mark also sits on the Audit Committee and the Remuneration Committee.  Then we have Nicky, who chairs the Investment Committee, and next to Nicky is Tim, who chairs our Audit Committee and sits on our Risk and Capital Committee. You've got the view there's quite a lot of committees here. And Tim is also our Senior Independent Director.  And last, but definitely not least, we have Gregor Stewart, who has been appointed to the Board as of yesterday, and is subject to regulatory approval, will succeed Tim as Chair of the Audit Committee at the end at the end of this board. Gregor brings a wealth of experience to the Board, having held senior executive and non-executive roles across insurance and asset management, and we're delighted to have him join us today. 

But before I go on further, I just want to say a few words about Tim. Earlier this year, Tim indicated his intention to retire from the Board at the end of today's AGM. Tim joined Royal London in April 2020 and has had a distinguished 40-year career in the city. We are grateful for his tremendous service to the Board over the past five years. I would also like to thank my predecessors, Kevin Parry and Lynne Peacock, who have both stepped down from the Board since the last AGM. On behalf of the Board, I'd like to thank them for their contribution to Royal London. So, please join me in showing our appreciation to all three of them for their service.  

So, moving on to the business of today,  I can declare that a quorum is present. The notice convening the meeting is being displayed on the screen, and, assuming that no one has any objections, I propose the notice is taken as read.  

Thank you.

The voting today will be conducted via poll.

Every member, duly appointed proxy, or duly appointed corporate representative is entitled to one vote.

For those who are joining us online, you will be able to vote via the AGM portal throughout the rest of the meeting.

And for our members in the room, please ensure you complete your voting card and pass it to a member of the Royal London team.

Any votes cast during the meeting will supersede those you may have cast before this point, and, as stated in the notice of the meeting, the Board recommends that you vote in favour of all of the resolutions.  

Voting is now open, and will close just before the meeting ends, and I'll give you a reminder for the last-, the last time you can actually vote. 

Turning to the agenda. In a few moments, I will share my reflections on Royal London's successes and challenges during 2024, what we have delivered for our customers, and the impact we have had on our stakeholders and wider society.

Barry will then take us through what the business has achieved, and the strategic progress made in 2024, before touching on our future priorities.

We will then move to the Q&A.

I will ask for final votes from those online before closing the AGM.

After being counted and verified, the results of the vote will be available on the Royal London website later today.

Let me now turn to the year in review. 

2024 was another year of uncertainty, with escalating geopolitical tensions and significant political changes across the world.

Following the announcement of significantly increased tariffs by the US, this uncertainty has continued.

As a result, investors have been concerned about trade wars, the return of inflation, lower economic growth, and resulting market volatility.

The level of market volatility we have experienced over recent months has obviously been unsettling for our customers.

Part of our role is not to overreact, and to encourage customers to take a long-term view of the value of their investments.

Periods like this highlight the importance of diversifying investments, and we are focused on offering you a range of investment options that can provide balance over the long term.

In the UK, cost of living pressures began to ease, and inflation has started to moderate, but economic volatility may continue in the short term.

We hope the decisions made in the October budget on taxation and public spending will start to bring some stability for UK households.

The government also announced a review of the pensions landscape. The first phase of this review proposed reforms to support economic growth, including encouraging pension funds to direct investments to specific areas of the UK economy.

Alongside this, the pensions industry has announced the Mansion House Accord, a voluntary initiative that aims to encourage greater investment from workplace pension providers into private assets.

We are pleased to be a signatory to this Accord and given our strong record in UK real estate investment, we are well positioned to play our part.

We are supportive of the government's agenda.

The Accord seeks to provide attractive returns to savers, while contributing to UK economic growth, and the reforms proposed will continue to allow pension providers to put their customer interests first.

In the coming months, we're expecting the government to provide an update on the second stage of its review, focusing on helping everyone, helping to make sure that everyone has sufficient income in retirement.

Delivering good outcomes for customers underpins everything that we do.

Royal London is committed to being there for our customers and our advisor partners.

Since beginning my role as Chair, I have taken great confidence from the passion and commitment shown by all our colleagues, which I believe will help ensure that customers and advisors continue to place their trust in us.

I would like to thank all of our colleagues, many of whom are here today, for their continued hard work and commitment during 2024.

Barry will say a little more, during his presentation, about the work we do to ensure good customer outcomes.

Being customer-owned directly influences the decisions that our business makes every day, and our mutuality enables us to focus on the long term for the benefit of our members.

In these uncertain times, we believe that a thriving mutual sector can open up opportunities to improve choice for customers and help them to build their financial resilience.

We support the government's ambition to double the size of the mutual sector, and we are proud to be a funding-, a founding member of the Mutual and Cooperative Business Council, which has been formally endorsed by the Chancellor.

I am pleased to represent Royal London on this Council, where we are working with government to help drive growth and strengthen the mutual choice.

Our commitment to helping customers protect their standard of living, and navigate the pressures they face, remains as strong and as important as ever.

This extends to the part we play in moving fairly to a sustainable world.

In particular, with climate-related impacts on society only likely to increase, we continue to champion a just transition. In other words, the transition to a low-carbon economy in a way that considers the social implications alongside the environmental impact.

The landscape surrounding net zero commitments has seen significant shifts in 2024, and in '25, with growing scepticism among some politicians around the urgency and cost of climate action.

As a result, some global companies are diluting their climate commitments.

We, however, continue to believe that the successful companies of the future will be those that adopt a long-term strategy for climate change.

To do this, we are reliant on policymakers and regulators to deliver on their climate commitments, and to establish and support rules that enable progress towards climate ambitions globally.

Without them taking a consistent, long-term approach, our business, and our wider industry, will be unable to achieve the ambitions we have set out.

We will continue to play an active part in constructive dialogue with government, encouraging them to deliver on their commitments, so that we can deliver on ours.

We have clear emissions reduction targets.

For our own operations, we are targeting net zero for scope one and two emissions by 2030. We achieved a 93% reduction against our 2019 baseline by the end of last year, which puts us well ahead on our pathway towards 2030.

The majority of our scope three emissions come from our investment portfolio.

These are emissions from the companies we invest in on behalf of our customers, and also those produced indirectly from our business activities.

We aim to reduce our scope three emissions by 50% by 2030, and to achieve net zero by 2050.

A fundamental part of our climate strategy is active engagement with the companies in our investment portfolio that are responsible for the highest carbon emissions.

Divesting from these companies would mean that we are unable to influence change. We therefore prefer to prioritise working with them, using our voting rights and meetings with management to encourage action on key issues.

We are managing our climate-related risks and opportunities. Building the trust and confidence of all our stakeholders remains of great importance.

We therefore remain committed to continuous improvement, and the highest standards of transparency.

We will publish our first Climate Transition Plan later this month, and the plan will outline our climate strategy, and the actions we are taking to manage climate-related risks and opportunities.

This will include our approach to investments in fossil fuel companies and how we will engage with them.

It is our expectation that the companies we invest in should also have a credible climate transition plan, with the initial emphasis being on larger companies and those with the most significant levels of carbon emissions.

If we find that an investee company does not have a credible plan for addressing these risks and opportunities, we will challenge ourselves on whether that investment will deliver the right outcomes for our customers and wider society.

Through our Purpose, we are clear about the difference we can make to addressing wider societal challenges, and this is reflected by our support for initiatives that focus on creating a positive social impact.

We have committed over 1% of our operating profits for each of the past four years, totalling over 8 million pounds.

We are in the fourth year of our partnership with Turn2us, a UK charity helping those living in poverty, which enables us to support people and their families to access funding and guidance.

Since 2021, we have donated and raised over 1.4 million pounds for Turn2us, which has supported an estimated 225,000 people to access the Turn2us helpline.

In March this year, we announced that we are continuing our commitment to Turn2us for the next three years.

We also have the Changemakers Programme, which supports social enterprises across the UK and Ireland that focus on promoting either financial resilience or the fair move to a sustainable world.

In 2024, we welcomed ten new change makers, offering each social enterprise a grant of 20,000 pounds to make a positive difference to people within their communities.

We also recognise the significant link between financial resilience and health, including the potential impact of serious illness on financial wellbeing.

With around one in two people likely to develop some form of cancer in their lifetime, it is a disease that can touch the lives of all of us.

Through our continuing charity partnership with Cancer Research UK, we provide charitable funding to support three key areas, innovations to improve diagnosis, cancer awareness training, and research into hard-to-treat cancers.

Through our support for these typically underfunded areas of research, we believe that we can help tackle cancer inequality and strengthen efforts to save more lives.

Our focus on seeking opportunities to support positive change across society extends to our sponsorships.

In 2021, we partnered with the British and Irish Lions on a feasibility study into establishing a Women's Lions team.

And at the start of 2024, we announced our role as Founding Partner of the women's team, ahead of its first ever planned tour, in 2027, to New Zealand.

Through our work with the Women's Lions programme, we also reiterated our commitment in 2024 to championing women's rugby from the grassroots up, including a new grant scheme for local rugby clubs.

Before I hand over to Barry, let me take a few moments to talk about what is perhaps closest to your hearts, ProfitShare.

It is one of the clearest ways in which we evidence how our mutuality benefits the majority of our members.

As we do not have shareholders, the share of our profits goes directly to our eligible customers.

I'm pleased that the continued strength of our business means that we paid 181 million pounds in ProfitShare, this year, to 2.3 million eligible customers, maintaining our allocation rate from the previous year.

This means that we have paid over 1.8 billion pounds to customers since profit share was established in 2007.

At Royal London, we are committed to, and proud of, our mutuality.

By putting you, our members and customers, firmly at the heart of the decisions we make; while also considering the contribution we make to the society in which we operate, we will continue to use our mutuality for good.

Our focus on helping people to build their financial resilience, and secure their retirement, will continue to influence the way in which we grow our business.

Thank you.

I'd now like to invite our Group CEO, Barry, to reflect on the progress the business made in 2024.

[Barry O’Dwyer]

Thank you, Isabel.

I'm delighted to be here with you all today, and to share how we continue to make progress in delivering on our purpose and strategy in 2024.

I'm also looking forward to the opportunity of chatting with those of you in the room after the meeting.

And thank you for joining us.

Everyone at Royal London is driven by our Purpose: Protecting today, investing in tomorrow. Together, we are mutually responsible.

It enables us to define the role that we have in helping to build a world that people can look forward to retiring into.

Before I move on to talk about our strategic progress in 2024, I'd like to reflect on how our Purpose determines why we exist as an organisation.

Through our Purpose, we're clear on the difference we intend to make for the benefit of our members, our customers, and wider society by driving three positive outcomes.

First, we want to help customers build financial resilience, helping them to protect themselves and their families in the near- and long-term.

The insights we develop into their needs and behaviours shape how we react, and how we improve what we offer them.

Having a sense of responsibility to customers is inherent for a mutual, and this extends beyond simply the products and services that we offer.

So, secondly, as well as supporting customers to build their financial resilience, we'll continue to play our part in moving fairly to a sustainable world.

This is a complex area, in particular the path to net zero, where, as Isabel mentioned, geopolitical uncertainty continues to shape the global conversation.

We want to influence positive change in the companies in which we invest, as part of using our customers' collective strength to best effect.

We also want to ensure that our engagement with policymakers and companies prioritises customers' needs.

And thirdly, we want to strengthen the mutual choice for customers.

Our mutuality is a powerful advantage. We're owned by our customers and have been since 1861.

Without the pressure of delivering for shareholders, our mutual status allows us to have a long-term focus, whilst supporting customers throughout their lives. And we'll continue to be a leading advocate for mutuality.

Our strategy, then, determines how we'll achieve our Purpose outcomes.

Our strategy is to be an insight-led modern mutual, growing sustainably, by deepening customer relationships.

As the UK's largest mutual life insurance pensions and investments provider, we invest in our products and services to meet the evolving needs of our customers.

Our pensions and insurance products are focused on helping customers build their financial resilience, protecting them now and in the future.

And we use our strength in asset management to develop solutions that offer good financial returns whilst also contributing to society.

We also look to manage our costs carefully, and, as you just have heard from Isabel, we share the benefits of our success with eligible customers through our ProfitShare scheme.

We know that these remain uncertain times for many people.

Over the last few years, the increased cost of living has been a cause for concern, and we've offered dedicated guidance and resources to help customers navigate the challenges they've faced.

This year, the scale of the tariffs announced by the US government, in April, caused considerable shock waves in financial markets, and there's still uncertainty about the long-term economic impact.

In response, we worked to ensure that customers had access to insights focused on helping them through periods of market volatility, highlighting the importance of taking a long-term view of their pension investments.

This included articles and videos from our experts, available through our mobile app, on our customer newsletters, and on our social media channels, supported by PR activity from our spokespeople to reinforce those key messages.

Many customers also look to their advisors for reassurance, and, in turn, we provide advisors with materials that can position them to offer this support.

Our distribution teams have helped financial advisers to shape their communications to clients, while our customer service teams have been on hand to guide both customers and advisers.

We believe that financial advice plays an important role in delivering good customer outcomes.

As we grow, we'll continue to enhance our offer to financial advisers, encouraging them to continue recommending Royal London, while promoting the importance of making financial advice accessible to all.

On that note, I'd now like to take a moment to update you on a few ways we enhanced our products and services during 2024.

We made improvements to our digital experience to help customers build their financial resilience.

These included updates to our mobile app and our digital portals, such as the introduction of retirement-planning tools to help customers understand what their future income might be.

We also introduced a, a more personalised financial wellbeing service, which offers guidance to help manage debt, budgeting, long-term saving and retirement planning.

 For advisers, we introduced a new online system to make it easier to manage their clients' plans, delivering efficiencies for their businesses and improving their client service.

Feedback from advisers on the system has included how intuitive it is to use and how it can make their day-to-day roles much easier as a result.

We have built a compelling bulk purchase annuity offer and in September we confirmed our entry into this market.

Our Bulk Purchase Annuity proposition is the only mutual offering in, in this market and we believe our commitment to member interests makes us an attractive choice for many trustees.

The transaction with the London Waste Limited Pension Scheme just announced last week is the tenth transaction we've done, and we've now reached the milestone of one billion pounds of liabilities.

The acquisition of Responsible Life and Responsible Lending in January 2024 has given us a great opportunity to broaden our offering to advisers and customers who are looking for solutions in retirement.

We believe equity release will become an increasingly important option for those with property wealth but insufficient pension savings and the rebrand of Responsible Lending to Royal London Equity Release has been well-received among advisers, reflecting the strong reputation of our brand.

In July, we finalised the acquisition of Aegon UK's individual protection business and as a result, strengthened our position in the UK protection market, welcoming nearly 400,000 new customers and their financial advisers to the Group.

Additionally, we introduced a series of improvements to expand the flexibility of our Income Protection proposition, with features specifically for the self-employed, pay-out limits that reflect today's living costs and more certainty for customers that their income will be maintained.

Our Asset Management business continued to deliver a good investment performance with new appointments across a range of asset classes, enabling us to build on our existing strength, including in global equities following the departure of some of that team in April of last year.

We also continued to build our Private Markets capability, we believe, as Isabel said, that diversifying the range of assets we offer will help clients achieve positive returns in a wider range of scenarios and we made good progress in 2024.

Building on our established, established track record in real estate and our commitment to responsible investing, we are supporting UK life sciences companies by providing infrastructure in key locations across what's called the 'golden triangle' of Cambridge, Oxford and London.

We also successfully completed the acquisition last year of 21,000 acres of prime UK farmland as part of a joint venture with South Yorkshire Pension Authority.

We made further progress last month in broadening our capabilities with the announcement of an agreement to acquire Dalmore Capital, the UK-based infrastructure asset manager.

Dalmore manages approximately 6 billion pounds of assets across five flagship funds, specialising in investments that include utilities, transport and energy networks.

The acquisition is subject to regulatory approvals but once complete, it will enable us to offer individual and workplace pension savers access to the long term, stable returns that infrastructure investments can potentially provide.

In April of this year, we reached an important milestone, reinforcing our long-term commitment to responsible investing.

We announced that our sustainable funds will adopt the Sustainability Focus label under the Financial Conduct Authority's new framework.

This framework is designed to bring clarity and consistency to the sustainable investment market and our adoption of these labels helps to ensure that our clients can identify funds based on their sustainability objectives and their outcomes to help them make informed investment decisions.

In Ireland, we delivered another year of strong performance supported by our focus on growing and enhancing our pensions offering.

This included the launch of a new Personal Retirement Savings Account in November which offers a regular premium pension savings product.

I'm also pleased that enhancements for our protection product range have helped us to maintain our position as a leader in the Irish broker market.

We track customer satisfaction through our Customer Value Statement score, which saw an overall increase in 2024 of three percentage points compared to the previous year.

And since 2020, we have seen an eleven percentage-point rise in customers who scored Royal London as nine or ten out of ten across its see, sorry, across its seven key measures.

On that note, I'd like to take a moment to thank our colleagues.

We rely on their continued commitment and dedication to ensure that we keep delivering for our customers and advisers.

We're committed that Royal London will remain a great place for them to work.

Colleague voice and sentiment play a key role in the culture we want to build within our business, and I'm pleased that our colleague engagement survey for 2024 included positive feedback on the belief and pride in our purpose and a sense of belonging and inclusion.

As we look to the future, we're growing skills and knowledge across our workforce that we believe will drive Royal London's success.

Improvements to our digital workplace experience support this agenda and last year, we launched initiatives to help colleagues use data more effectively across our business.

To develop our pipeline of talent, we continue to focus on our early careers programmes and also, our Career Confidence programme, which focuses on career progression for women and those from wider ethnicity backgrounds.

Now turning to our trading performance during 2024.

The progress we made supported an increase in operating profit before tax of 11% to 277 million pounds, up from 249 million pounds in 2023.

Life and pensions new business sales were up 17% to 10.8 billion pounds with good growth across all our main product lines.

Our pensions business benefitted from increased transfers in, supported by improvements in our digital transfer offering, which encouraged more customers to consolidate their pensions with us.

Protection sales were also up, as we secured more larger cases and, as I've already referenced, we successfully launched our new Bulk Purchase Annuity business in the second half of the year.

We also delivered positive performance through our Governed Range where most pensions customers are invested.

And the Group's total assets under management increased to a record 173 billion pounds, up from 162 billion pounds at the end of 2023.

The active management of our capital and our focus on controlling costs means we were able to ensure that our capital position remains robust.

As a mutual, that's good news for our customers. In April, we shared 181 million pounds with 2.3 eligible customers through our ProfitShare scheme.

Now, this is the ninth consecutive year that we've shared our success with customers in this way.

Over the last few years, we've laid many of the foundations we need to turn our strategic ambition into reality and as we look ahead, we're continuing to build momentum.

We remain focused on delivering digital journeys, expanding the range of solutions we offer and running our business efficiently to generate ongoing value for our members and strengthen our relationships with customers and advisers.

There's no doubt we are living in interesting times.

Significant uncertainty remains in the external environment, but we're well positioned to help customers navigate this environment as it continues to evolve.

We'll embrace change to help customers build their financial resilience and protect their standard of living.

And by enhancing the breadth of our offering while growing our business sustainably, we'll continue to offer a strong, mutual choice for customers to support customer and adviser needs now and for decades to come.

Thank you and Isabel, I'll hand back to you.

[Isabel Hudson]

Thank you, Barry.

So, in a few moments, we'll open the meeting to questions from our members but as a reminder now, voting on our Resolutions is still open but will be closing after the Q&A session.

All our Resolutions are proposed as Ordinary Resolutions, with the exception of Resolution 5, a Special Resolution proposing updates to our Articles of Association.

As is best practice, the Articles have been reviewed to ensure they remain aligned with the latest company law and to reflect changing market practices, including doing more business digitally, which is a growing preference among our Directors and members alike.