Annual General Meeting (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.

So, now to questions, if you are joining virtually, you'll be able to submit your question by typing it into the Q&A tab on the online platform and one of our team will pose the question on your behalf.

However, if you have a video camera and microphone, you also have the option of appearing on-screen and asking the question yourself.

If you would like to do that, please use the 'request to speak' option on the Q&A tab and a member of our team will set you up to ask your question.

For those people in the room, the process is a little more traditional, please just raise your hand and one of our team will pass a microphone to you. Please just state your name before you ask your question.

Can I remind you to keep your questions relevant to the business of the meeting.

As you will appreciate, we cannot discuss any individual matters in this forum, but we do have a number of customer service representatives here today and they will be very happy to help you after the meeting.

In addition, where questions touch on similar themes or issues, we will seek to address them together to ensure we use the time more efficiently.

We have some time for questions but if we do not get to your question, please be assured that we will take note of it and respond to you directly and I may also direct you to some of our staff here will be very happy then to continue to discuss matters with you during the lunch.

To get us under way, I'm going to ask our Policy Director, Jamie Jenkins, to ask the first question, which was submitted by a member via email, I think. Jamie? Thank you.

[Jamie Jenkins]

Isabel. Yes, we had a number of questions that have come in in advance, some of which we've sought to respond to but there were some themes in that and certainly, one of those around how the business is doing now and some of it relates to, you know, things that have happened since the business year we're talking about last year, so some of the issues of today and I thought it'd be quite good just to get your early reflections, if I may. Given you've been here three or four months now, on the business, what, what do you think overall?

[Isabel Hudson]

Thank you, Jamie. So, sort of, perhaps a couple of reflections from me, after I think it's, three months. One, I would like to take this opportunity to say thank you to the warm welcome that I've received from everybody. it's been a pleasure to get to know everybody and understand what this business is doing.

I'd also say that it's very clear, in every interaction I've had, how much this company lives and breathes mutuality and believes that it is something that makes the company special and wants to think-, to think more about how we bring-, increasingly bring that mutuality to life for our members and our policyholders.

I think I've been pleased to see that the company is in a very good position, we've-, we are demonstrating good growth, we are strong financially and producing good profits and that-, I think that is key to the theme of financial resilience. Unless Royal London is financially resilient, we can't help our members to be financially resilient. So, with that, we need to continue to keep an eye on in these uncertain times, and make sure that we are-, you know, we're going to be here in the long term for everybody.

I think the other theme I would mention about, about the rest of this year and looking forward would be there's a lot changing, not only in the, sort of, geopolitical markets and the political developments we've talked about but also, actually, in the life and pensions environment and we've touched a little bit on some of government's activities there and that creates a lot of opportunities for us and what really resonates with me is our focus on financial resilience. We are looking at a future where more and more people are saving through defined contribution, they, they are building up, over time, significant pots of money but also facing much longer times of retirement, which is positive in principle but it gives other challenges as to how people finance their retirement, how they, they take a view as to how long they're going to live and what they're going to invest in. And therefore, there is a huge opportunity for us, as a mutual, to help people at that critical moment in their retirement and in particular, to play what I hope is out there, which is the increased trust that we are determined to earn and keep, so that people will choose us to help them with these difficult decisions. So, there's a really big opportunity for us, I think, to grow and help people there.

Okay, shall I come to another one or do you have any in the room? Are there any questions in the room, perhaps, first of all? There's one at the back there, I think. Yeah. Thank you.

[Member]

My question is, you mentioned that, for carbon emissions, you're aiming to get to net zero by, for business, for investments, 2050. That seems a very long way away, I just wondered if you could explain, kind of, the reason you chose that, sort of, timescale?

[Isabel Hudson]

So, yes, it is a long way away but also, this is something there that is not under our direct control. So, for us to get there, we need to work with all the various companies that we're invested in to help them to get their carbon emissions down as well. So, it is a long target, long-dated target but also, it's a challenging target and I also made the point that we're also reliant on the environment continuing to remain positive. I think, a couple of years ago, we were definitely flowing with the-, with the trend and leading that trend, now we're in a situation where, actually, there are some contrary views around the world, so it's going to be a-, I think a-, sort of, a, a tougher trajectory but Barry, do you want to add, add something?

[Barry O’Dwyer]

Only to say that the 2050 target is consistent with the Paris accords, so it is quite a common target across all industries. I think-, I do have sympathy, like Isabel, with the fact that it does seem like a long way away, but this won't be a linear progression to net zero, it will be quite a complicated path, and it has already shown itself to be quite a complicated path. So, I think our adoption of, of 2050 is ambitious, it's consistent with the companies in which we invest and hopefully, it will remain consistent with government policy and not just UK government policy but governments across the world, as Isabel said. Thank you.

[Isabel Hudson]

Are there other questions in the room? If not, there's one here, two here and then, Jamie, we'll go to any other questions online.

[Member]

Hello, Barry, in your presentation, the early part, you mentioned about equity release as a new business. Could you further elaborate on it and how do you find the prospects of that business?

Yeah, we, we acquired a company called Responsible Life a couple of years ago and it's active in the equity release market. Equity release is a very good product if sold well and understood well by customers and so, we have very much focused on the quality of the advice process that customers go through, but it can be a very, very useful product for people who are asset-wealthy, the-, so, sitting on, on large amounts of housing wealth but who don't have a pension income.

It has been a difficult couple of years for the equity release market because after the Truss mini-budget, when interest rates rose pretty dramatically and very, very quickly, the demand in that market fell away considerably, so-, because the price of the products went up overnight. It is starting to come back, and 2025, the first quarter of 2025 was the-, was the best quarter the market had in some years, so it is-, it's, it's probably a, a product that we're investing in over the long term because we think it will be a long-term important product for customers, but in the short term, it's quite a small product for us, and quite a small product in the market.

[Isabel Hudson]

There was another question here.

[Member]

Part of the volatility of the marketplace, as far as investment of the past several years and in particular since the third quarter of last year, has been the heavy weighting of institutional and pension money into the United States as an overweight investment proposition and yet, on the contrary, is the underweight to UK domiciled investment. What's the investment committee's view as to whether or not there should be an obligation of UK firms for-, to invest in the UK market?

 

[Nicky Richards]

Well, unlike many other of our competitors, we're actually-, we have been underweight, the US and overweight, the UK. So, our weighting in workplace pensions in the UK at the moment is 20%. Now, the UK, as a composition of the global index, is only 3%, so that shows our weighting, our overweight proposition and we also think, as of today, that the UK market offers very good value relative, actually, to the US market, with the valuations that are there at present.

[Member]

My question is whether you feel it should be an obligation.

[Nicky Richards]

To invest in the UK? It's a very good question. I don't think it should be-, well, so, if we talk about the weighting, 3%, then yes, that would be a relatively easy thing to determine. Should it be an obligation to go above and beyond that? I think that depends upon valuations. It being an obligation and us saying, 'This is a very expensive market, and we don't expect it to perform well,' I don't think is the, the right thing to do on behalf of our client base and our members.

[Isabel Hudson]

Okay, thank you, Nicky. Do we have some online questions?

[Jamie Jenkins]

We do, thank you, Isabel. So, there were some more around investment and there is one, again, relating to the UK but with slightly different theme, Kevin Jones asks whether or not pension funds are being invested sufficiently in UK defence, given some of the recent pronouncements by government, even just as recently as this week?

[Isabel Hudson]

So, our position on, sort of, investing in defence is the question. So, I think I'll make a couple of comments and then I think I'll pass onto Dan to, to add some things on that. So, a couple of things, one is that, above all, we believe in our customers being able to exercise choice and so, what we're trying to do is provide a range of funds and in fact, there are only about 7% of our investments are in funds which specifically exclude defence and aerospace, the rest include but the key point is that it's for our investors and for our policyholders to decide they invest in, so we offer choice. Dan?

[Dan Cazeaux]

Yes and I suppose, just, just to add to that a little bit, so, if you look at the, the core allocation in the UK, we've already touched on the UK allocation in what Nicky's just talked about in terms of our overall allocation, as, as Isabel said, we invest in all companies in the sector, on some of our core funds, with some choices to select without defence in it. In terms of exclusions, maybe to add a little bit on that, we don't exclude defence, obviously, given the allocations, what we are careful though is that we don't include any companies in our portfolios that-, involved in things like cluster munitions or some of the things that are prohibited by international law and we are very clear that those are not part of our portfolios. Otherwise, they're part of the core index and they're part of the core investment universe in which we, we look at that, but we look at the underlying performance and prospects for each investment on a case-by-case basis.

[Isabel Hudson]

Thank you, Dan. Number four, over there.

[Member]

I'd like to thank you all for organising the AGM. I just want to ask that, in terms of your diversity and inclusion policies, would Royal London be involved in supporting organisations who deal with prostate cancer, that affects predominantly African and African Caribbean men? Are you involved in organisations supporting them or would you be interested in doing so? We know that, recently, the actor, Idris Elba, has been involved in campaigns to do with such issues.

[Isabel Hudson]

Thank you. Thank you for your question. I'm going to turn to Tracy in a minute, perhaps to give a bit more detail, but I just want to go, first of all, to generally, sort of, diversity. One of the things I've been impressed about by this company is that there is a real push to get diversity across the organisation, and you might assume that it's something it's particularly, sort of, close to my heart, but the specific question, Tracy, do you want to, sort of, respond to that?

[Tracey Kneller]

Yes, so, we, we don't currently obviously take part in any of the funds that actually deal with prostate cancer itself. Happy to talk after the session, if that's something we could do, but we are very active in trying to make sure that we have a diverse portfolio of, of companies that we work with, and partners that we work with, to ensure that we are trying to spread as much as we possibly can to attract and obviously recognise the diversity of our members, customers and obviously our workforce. So, there's lots that we would like to do. We do try and make sure that we target things where we can make a difference, but I'm happy to talk about the-, that particular one, it's a particular interest of my own. So, yes, I would be very happy to have a conversation about what we might be able to do. Yes, okay, thank you.

[Isabel Hudson]

Was there another question back there as well I saw? Here.

[member]

Yeah, hello. You mentioned earlier that you acquired farmland in Yorkshire, I think Barry mentioned it, and I'm, I'm just curious to know why, and what Royal London intends to do with it?

[Isabel Hudson]

I'll hand over to Barry, although I will say that-, before I say that, is that Barry is desperate to drive one of the combine harvesters there, but so far we've stopped him, we don't trust him with the expensive machinery, but with that in mind, he'll come onto a bit more detail.

[Barry O’Dwyer]

Quite right, too. They allowed me to be photographed behind the wheel, but I wasn't allowed to drive it. Yeah, it, it, it's not quite in Yorkshire, it was-, it's, it's a joint venture with the South Yorkshire Pension Scheme, but it is 21,000 acres of land, and if, if I try and describe where it is, I'll get it wrong, but my colleagues know exactly where it is, Cambridgeshire and, and Norfolk, I think. It's, it's part of diversifying the portfolio that I talked about in my comments actually, that, you know, what we want to do is offer pensions customers the widest possible range of asset classes, so that they can benefit from assets that don't move in line with one another. So, as the equity market does well, other assets might not grow as much, but vice versa. When the equity market falls, other asset classes can do well, and we've been doing this for many, many years.

Our Governed Range, which is the, the range of funds that most of our customers are invested in, is more diversified than all of our competitors in that market. Has been for years, and, and we want to continue to add to that trend. I mentioned Dalmore, the, the acquisition we planned in the infrastructure space We want to add, add that to our customer offering.

On the, the farm itself, it's principally-, it's an arable farm, so it's principally there to provide food, you know, and we're, we're, we're not going to change its core purpose, but we do have some ideas about how we could make the farm more efficient, and also contribute to our, our wider goals. We have lots of experts from the farm in the room, and I'm sure we can hook you up afterwards with, with one of the experts. Maybe not anybody that actually works the farm, but somebody that knows more about it than I do.

[Isabel Hudson]

Thank you, Barry. Jamie, anything else from online?

[Jamie Jenkins]

Yes, probably more than we can get through. I'll do my best, and again, try and pick out some themes, but a different one, we'll try and deviate from investment for a second. Hasheem, one of our members, asks online beyond the AGM, what, what initiatives are in place to encourage ongoing member engagement and feedback throughout the year? Are there other things that we can do on that front, or that we currently do?

[Isabel Hudson]

Yep, so before I hand over to Barry, I'll just say that it is something that we're very mindful of. I'm delighted, actually, to see so many people in the room today, and I think we've got-, we had, I think, over 800 people who indicated they were going to join online. I don't know whether everyone managed it, but to have-, one of the challenges of a mutual, I think, is to make sure that we stay engaged with our, our members and our customers, so it's a really important theme, but I'm going to let Barry comment in a bit more detail.

[Barry O’Dwyer]

Yeah, we take this very, very seriously. We don't do set pieces like this very often. Obviously, this is an annual event, but we do lots of engagement with our members, and, and surveys of our members to check in with members as to how we're performing. So, the customer value statement that I mentioned in my remarks earlier is a very comprehensive survey that we do with 4,000 customers, routinely, every few months, to check in on how we're-, how we're doing across seven things that our customers and members have told are-, told us are vitally important to them. So, we do take this incredibly seriously, but we do take different approaches, including digital approaches, to try and get as much feedback as we possibly can.

[Isabel Hudson]

Anything else online?

[Jamie Jenkins]

Yeah, Jeffrey, one of our members, asked-, it does relate to investment, but with a different theme. So, you talked a little bit, Isabel, about diversity and inclusion, and one of the questions there. His question is around how we are seeking to influence the companies we invest in on diversity and inclusion, so some of our stewardship activity. I wondered if we could talk to that for a second.

[Isobel Hudson]

Dan, do you want to take that one?

[Dan Cazeaux]

Yeah, happy to. So, we, we have a Stewardship and Engagement Policy, which applies across the whole of Royal London, so within RLAM, the asset manager, and across the group, and we, we have some external asset managers as well, and the policy applies there. That policy covers a whole range of initiatives. It covers climate, as we've already talked about, it includes diversity, and it includes social aspects as well, and we engage with a whole range of companies across all of those aspects. We do a lot of that, as we referenced earlier, through voting at companies' AGMs, and engaging with management teams within, that activity is led by a stewardship team. Well, there's two stewardship-, one within the Group, and one within the asset manager, which effectively makes sure that we are doing that consistently across all the companies we engage in. Obviously, there are a lot of companies we engage in, so the level of engagement we have will vary depending on the size of the company, from just a pure practical perspective, but it covers all aspects that we would see, and much way in the same way as some of the topics we're discussing at the AGM here today.

[Isabel Hudson]

Thank you, Dan. Other questions in the room. There's one here, and then there's one at the back. We'll take this one, number two, and then we'll do number three at the back. Thank you.

[Member]

Just a quick question, how do the directors and the business view the challenges around encouraging greater long-term saving versus some of the things you pointed to, in terms of cost of living crisis, and people's desire to get on the housing ladder? Do you have a view about how to balance the two, or, or how to creatively get around these problems, to drive long-term saving?

[Isabel Hudson]

That's a-, that's a very interesting question. I suppose, I'd, I'd make a couple of comments. One - we are a great supporter of people taking financial advice. Obviously, that's a, a major distribution channel for us, but also, we think that this is where people can get good input and advice on, on how they do things. I think it's for everybody to decide how they want to try and balance that, you know, and everybody's financial situations are different, depending on whether you've got a mortgage, or what other commitments you've got, and I suppose, you know, what we're trying to do is, again, is to encourage people to have balance. To provide something-, some money that's locked away for the future, and but, but also make sure that people aren't doing something disadvantageous in the short term. I mean, it's a very generic question, and I think also, one of the things we try to do is to have a number of people from Royal London, I think some of you will be familiar, who regularly talk on radio and TV on some of these topics, to get people thinking about how they balance the various, sort of, financial decisions that they have to make. Barry, do you want to add anything?

[Barry O’Dwyer]

Just, just one quick thing. On the pensions review that Isabel mentioned, the, the second part of the review is about the adequacy of pensions savings in the UK, and I think we can learn from international markets. If you look at what happened in Australia, where the contribution rate steadily increased over time, so that as people's pay increased, a small amount was set aside for their pensions saving. It seems like a very sensible idea, and most simple ideas actually are quite sensible, and we'll be encouraging the government to something like that. To introduce a step up in contributions over time, so that we get to a point where most people are contributing a sensible amount to their pension savings.

[Isabel Hudson]

Question number three.

Oh, hi, hello. You mention the Mansion House Accord investments, also the bulk purchase of the London Waste Pension Scheme. Also, buying the land, and also buying Dalmore, and your intent to buy in transactions. Are you spending a lot of money?

[Isabel Hudson]

I think I might say we are investing. You know, we're investing in buying these, these books. We're, we're investing on the basis that it will prove-, they, they will be profitable for Royal London, so it is-, it is a business opportunity. We think we have some unique advantages. As Barry said, we are the only mutual offering in this market, and from the point of view of those members of pension schemes who then get bought out by another company, I think it's, you know, we, we know that a lot of pension trustees think long and hard about to whom they pass these obligations, and are very receptive to having a mutual player in that market. But at the end of the day, it is an investment for us on which we will make a very carefully calculated return. Do you want to add anything, Dan?

[Dan Cazeaux]

Just briefly to, to add. I think within the examples used, there's a-, there's a blend of investing member money to generate returns for members, and then there's a bit about investing capital. So, just, just as Isabel said, we have a strict return on capital framework that we apply. We've talked about having a robust capital base. We are very careful, whenever we are investing, either in a new business line, or in an acquisition, which is adding capability to the organisation, to enhance member value in the future, that we hit all of those, those targets. Not just to the point where we make the, the decision to invest, but as going forward over time, we come back and review, to make sure that we are making those returns.

[Isabel Hudson]

Thank you, Dan. Anything else online?

[Jamie Jenkins]

Yes, we have, and, let me ask a couple in conjunction, if I may. Again, they're investment-related, but quite, quite broad in nature. So, Kevin asks how we are facing into some of the issues around the volatility that's created by today's geopolitics. So, our thoughts, sort of, looking forward, and how, how we deal with that. Zachariah has asked why don't we simply offer a global tracker, so a fund that simply tracks markets, rather than seeking to actively manage investments. So, maybe take those two together.

[Isabel Hudson]

Alright, I'm going to ask Hans, who is our chief executive of Royal London Asset Management. Hans, do you want to talk to these points?

[Hans Georgeson]

Thank you very much. So, I look after the asset manager within Royal London. As you called out, it has been a pretty volatile market conditions. We are apolitical in our views on markets. What we try and do is identify the right investment opportunity. As Isabel and a number of the panel have talked about, the critical thing for us is to look at the medium to long term.

If you look at medium to long term, the investment performance for Royal London has been very, very strong, and one of the things that we really focus on is to make sure that we don't take short-term, knee-jerk reactions in response to quite volatile circumstances.

If you want one simple example, if you've been watching the market through the course of April, the announcements on US policy, in relation to tariffs, clearly had a very significant impact. If you had taken immediate action, you would probably have made a significant loss. The markets actually came back relatively swiftly thereafter, and so we have a team of about 200 people in our investment front office, who are really focused on making sure that we take the correct medium to long-term actions on behalf of our policyholders and clients.

[Isabel Hudson]

Thank you, Hans. I think I'm right in saying that the market is now higher than it was on the 2 April when these announcements were made, which just goes to show how volatile everything can be.

Have we got other questions online? We do. Shall we do another couple where-, Let's do another couple. Slightly overrunning, but only-, That's okay and, and also, sort of, perhaps just a comment to people in the room, if there's anything else you want to ask, please raise your hand and we'll come back one last time to the room, but we'll take a couple online at the moment.

[Jamie Jenkins]

Okay, yeah, let me give you two, unrelated in this case.

So, there was another question on the farm about-, everybody's very interested in the farm, which is-, which is great. Question about any impact of the IHT changes that farmers are protesting about and does that play into our purchase of the farm at all, and secondly, a question, just more generally, about the, the, sort of, approach to regeneration we have. So, there's a couple on the farm, if I may. Can I add one more?

[Isabel Hudson]

Yeah, please do.

[Jamie Jenkins]

Because it's, it's quite different. So, given some of the recent issues that some of the big retailers have experienced on cyber, cyberattacks, and our, sort of, approach to AI and digital, how resilient do we feel as we enter that world?

[Isabel Hudson]

Okay, so I'll, I'll make a couple of comments on the first one, and then maybe hand off to Mark. just on, on that, and then I'll leave the Farm to Barry. So, on cyber, as you can imagine, I mean, it's just been, you know, it's just been top of the news, hasn't it, with Marks & Spencer, in particular. So, as you can well imagine, that in, in our recent Risk and Capital Committee, there was quite a lot of discussion about the risks and how well prepared we are, and I suppose there's two things I would say. One is just building your defences in your IT systems, but I think as some people will know, actually Marks & Spencer, I think, had some pretty decent systems, because that's not how the cyber-attack took place. It was actually what was known as social engineering. So, somebody rang up the help desk and impersonated an employee.

So, we had a discussion about both of those aspects, the extent to which our technical strength of our systems, but also, the extent to which we are constantly testing people. So, everybody, including myself, we, we-, there are regular phishing emails going out to see how many of us will click on them and, and do something silly, and then we get feedback if we did. I haven't done it yet, but I'm, you know, fingers crossed.

So, it is a really important topic, but I think we also have to recognise that, you know, the onslaught that's out there, you know, it's not only also protecting and stopping somebody getting in, we also talk about how we will-, we'll manage it, if and when someone does come in, because it's impossible, I think, for any company to say that no one's ever going to get into your systems. So, we look at-, we look at all of those aspects.

Do you want to add anything, Mark?

[Mark Rennison]

Yes, only just to say, I mean, I think you probably made all of the relevant points there, Isabel. From my point of view, it's-, this is a topic that is occupying a considerable amount of time within the Risk and Capital Committee. People might often think from the name of that committee that we focus solely on the financial health of Royal London, and the financial resources, and the capital that sits behind the balance sheet of Royal London. But actually, increasingly, and I think this is consistent probably across most large organisations, we are spending an awful lot of time thinking about issues like data security, information security, and the security of our systems.

And I think it has become a global stage. This is not about criminal gangs in the UK, or small-scale activity, this is increasingly about nation states, and very well-organised and really quite sophisticated criminal gangs. Fortunately, I think Royal London is not in the absolute frontline of some of the attacks. Some of that might be more to do with government agencies. It might be more to do with some of the very, very large global banking groups, some of which, of course, are domiciled in the UK, but I think the, the question was around how confident are you? I think the answer is we are pretty confident, and we are investing an awful lot of time, and quite a lot of money, in terms of moving forward the capabilities of Royal London to defend against this activity, but whilst we're confident, we're certainly not complacent, because I think Isabel has quite rightly just made the point that I think it is naïve to believe that you can guarantee that your defences in this area will never be breached. Therefore, you have to be prepared to respond to a breach, as well as to try and defend and stop that breach happening in the first place.

[Isabel Hudson]

Yep, thank you. Mark. So, the Farm, Barry.

[Barry O’Dwyer]

Yeah, we'll finish on the Farm maybe, yeah. So, a couple of things there. On the inheritance tax changes, I think we'll see, in practice, the effect of that over quite a long period of time, because clearly, the change will happen as the-, as the farm owners die. It may mean that, that families have to sell up, family firms, more than they have done previously, rather than handing them from generation to generation, which in turn, means that the UK will become more reliant on strong and responsible corporate owners of farmland over time, and, and I suppose I would categorise Royal London definitely as that.

In terms of regeneration, I spent a day on the farm with the, the farm managers, and I have to say, I was incredibly impressed with the extent of which, before Royal London even had properly taken ownership of, and certainly changed any direction, they were already thinking about how they measured emissions from the farm, how they limited emissions from the farm. How they made the farm as productive as possible, but in terms of producing food, but also having the minimal emissions that, that we could possibly have.

Also, looking after the farm are-, sorry, the, the, the natural world, so the, the species that live on the farm, the wild species that live around the farm and in the lake that's on the farm. So, there is a lot of work that goes-, detailed work that goes into the sustainability and the regeneration potential for the farm. It sounds like there's appetite for us to perhaps do a video for next year's AGM, so we can-, we can bring members up to speed with what's going on on the farm. I was just going to suggest that. A video sounds proper, then maybe some, some of the produce for lunch, or, you know.

[Isabel Hudson]

Thank you, Barry. So, we are probably overrunning just a little bit. I did say I'd give one more opportunity for anybody else to ask a question in the room. I'm just, sort of-, I think probably there are no more questions. I just want to emphasise that we'll all be available over lunch, so if you want to come and buttonhole any of us on anything that you would like to ask on a one-to-one basis, we're all very happy, and we've got all of the Royal London team here at the front.

So, you know, also come and nab one of us and say who you want to talk to, and we'll help you find the right person as well.

So, if there are no more further questions, I just want to remind everybody that in a few seconds, we'll be closing the voting on our resolutions.

For members in the room, you must hand your voting cards to a steward on your way out. Your voting cards must be submitted before you leave the room. I've been asked to emphasise that. If you require any assistance, let one of our stewards know, and they will be happy to help.

As a reminder, once all the votes have been counted and externally verified, the results of the voting will be published on our website later today.

I can now confirm that the online voting has been closed. As always, I would like to thank the people who have made today possible. We know it's not a small undertaking to put on such an event, both online and in person, and the efforts of the team, and everyone who's been involved in that, and, and helping Barry and I practice and sort everything out, it's really very much appreciated.

I'd also like to thank my fellow Board members for your insight, challenge and commitment over the past year, and of course, finally, thank, thank you, our members, for your continued support, and for joining us today. I'm very pleased to have this opportunity to speak to you, and it was really good to see the number of questions coming through.

So, this concludes, formally concludes, Royal London's 2025 Annual General Meeting, and just a final reminder to pass your voting cards to the steward before you leave the room. I'm sorry we aren't able to meet those of you who've participated online.

For those in the room, I'd now like to invite you to join us for light refreshments. I had a request earlier on for pizza, I can't guarantee that pizza's going to be there, but I think there's some other stuff there, and one last, sort of, thank you. I don't know whether it's started raining out there, but please take care. I think there's a bit of an absence of zebra crossings round this area, but be careful as you're going home, and a final thank you from me.