CEO Introduction.
Our Core Responsibility
"As an insurance company we must ensure that we connect with the day-to-day lives and concerns of our customers and act as a responsible steward in our capacity as one of the UK's largest shareholders."
Tim BreedonGroup Chief Executive & Chairman of Group CSR Committee
In 2009 we were responsible for six percent more customer policies than in 2008, showing that even during a recession clients trusted our products. With that trust comes responsibility.
Success in our business can be simply measured by whether we deliver on our promises to customers, which include:
- To enable customers to save for a pension which will provide them with an income in retirement for life.
- To provide investment and savings products which allow individuals and families to plan for the future.
- To pay out valid claims when a customer becomes ill, is unable to work or dies.
- To pay out valid claims when a customer's home is damaged.
Without fulfilling these obligations we cannot campaign credibly on broader issues affecting our customers. This is not only an imperative for us, it is an issue our industry needs to continue to address and Legal & General intends to be at the forefront of this drive
A closer connection to society's issues
Beyond our core responsibility, we also understand that engaging with wider society on broader social challenges can improve people's lives, and help us to improve our products. To help us do this, we formalised core campaigns across our Savings, Risk and Investment management businesses in 2009. These form an important part of our CSR activity. They focus on social issues and offer us opportunities for us to use our scale and expertise to contribute to solutions, such as:
- Good corporate governance
- Responsible commercial property investment
- Health of the nation
- Developing a savings culture
- Housing matters
- Preventing pensioner poverty
This year's online CSR report highlights our campaigns in the What Matters To Us section. We also invite and welcome feedback. Tell us what matters to you – use this site to tell us what you think we should be working on.
Core Purpose needs committed employees
To deliver good service and robust returns we need to harness the expertise and skills of our employees.
Our staff survey reflects the tough challenges we faced in 2009, but also shows that the people we employ believe in our business and its purpose. Three quarters of our employees believe we run an Ethical Business. Our challenge in 2010 is to provide our employees with a stronger sense of purpose about our business and the benefits offered beyond remuneration as part of the total Legal & General employee package.
Campaigning for the UK Economy
During 2009 we received an increasing number of questions from stakeholders about the extent of our involvement in broader economic issues beyond the normal remit of our CSR activity. During the year we worked on two ideas, which would enable the insurance industry to play a greater role in economic recovery.
The first of these entailed greater risk sharing. Industry and the Government share the provision of cover for what is known as "addressable risk" in the UK. This means each side picks up its part of the costs of ill-health, healthcare, unemployment and pensions. At present, the Government picks up 65% of all addressable risk through its various benefit systems and 35% is covered by the Insurance industry through the products provided to clients. We would like to see more debate on appropriate risk sharing given constraints in public finances.
Secondly, we have been exploring how best to enable pension fund savings to be deployed to invest in economic growth, particularly infrastructure, through the creation of a UK Development Bank which would connect a natural supply of, and demand for, funds. The concept of a 'Green Investment Bank' has now entered mainstream political debate. Insurance companies need to invest in long-dated assets to match the long-dated cash flows and it is wholly appropriate that the beneficiaries of this investment should be future generations of users of UK infrastructure. We also believe that it would be beneficial for pension savers to be able to make a direct connection between their contributions and improvements to their living environment.
Ensuring safety in numbers
Above all else our responsibility is to connect with the day-to-day lives and concerns of our customers and continue to provide the benefit of "safety in numbers" that our industry uniquely provides. Without our industry individuals would have to cope independently with the costs of unforeseen events without the benefits of sharing the burden of the risk with others. For the majority, this just would not be possible. Our aim is to make the opportunity to benefit from this as widespread and accessible as possible in UK and overseas markets.
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