Core product responsibility.

Over the last four years the number of customer policies we are responsible for has increased by 25%. We have also seen a ten percent increase in the number of customers who agree that we really care about them from the ABI customer Impact Scheme research.

Complaints are another key way of getting feedback from clients on how well they think our products are meeting their expectations. Trends on complaints are monitored, reviewed and acted upon at both product and executive level. There is a monthly Complaints Committee chaired by the Group Risk & Compliance Director where the reasons for complaints and the overall quality of complaints handling is independently discussed. We are aiming to include quantitative information on complaints levels in future reporting.

2009 was a difficult time for our clients with turbulence in global financial markets affecting the performance of some products. This directly affected us when 2,300 of our 7 million customers saw the potential value of our Guaranteed Equity Bonds, which were underpinned by third parties, decrease when investment bank Lehman Brothers collapsed. As a result we have changed our approach to due diligence when we design products of this type to ensure that our customers are fully aware of where their money is being invested. We recognize the risks that come with our policies, clearly communicate these risks to customers, and take a prudent investment approach to best protect the performance (and reputation) of our products.

Our Risk business paid out 93.6% of critical illness claims in 2009, a figure that has increased every year since 2005, when it was 79%. Of the claims that were declined last year 1.8% were for non-disclosure and 4.6% were for not meeting the policy definition. This is one of the lowest declinature rates in the industry. In total, £152 million was paid out to 2149 individuals and families, helping to make their lives easier at an extremely difficult time.

Checks and Balances on our performance

We regularly research and review what our customers think of us. The Customer Loyalty study is our largest single piece of research. We look at what drives customer loyalty and what we can do to improve the service we offer. In the past three waves, we are proud to have maintained a consistent level of 'loyalty' across the company, despite the recent market turmoil.

In addition to discussing products with our clients we have various checks and balances in place to measure and monitor how well we are performing as a business and whether we are delivering for our customers when they need us.

Internal bodies include:

• Our Groupwide Ethics Committee governs policy across Legal & General to ensure that our staff adhere to our Ethics Policy Ethics Policy
• Our Group Advertising Standards Function ensure we are compliant with FSA codes, and our own stringent guidelines, when we communicate about our products

We also measure product performance using external ratings:

• We work closely with our regulator, the FSA, and follow the Treating Customers Fairly (TCF) principles laid out for our sector.
• ABI (Association of British Insurers) Customer Impact scheme - we've taken part in this programme since its inception, and even help to set it up. This is an industry wide study looking at customers' attitudes to their products and the providers of these products. We track what our customers think of us against compared to other companies' customers. The scheme aims to raise the standards of customer experience across the whole industry. Each year we take steps to address any issues arising from the study and aim to improve our performance in the eyes of our customers. The full report is publicly available on our Group website.
• The Financial Ombudsman also publishes industry data on how many clients ask for an independent review of a complaint decision made by financial services organisations. Performance is also published online.

Getting Closer to Consumer Sentiment

In 2009 we were lead sponsors at the first National Consumer Federation conference which recognised that the consumer had been under-represented during the recession, and that the financial services industry needs to be more transparent. This also gave us an opportunity to better understand consumer sentiment in the recession. We were the only Financial Services provider involved in the event.

Improving Product Accessibility

It's important to us that our products are made available to socially excluded or fringe markets which would traditionally be seen as higher risk. This often involves changes to the way we distribute, underwrite or price our products and can often involve bringing in experts to inform us on specific issues.

We do offer an Over 50's plan provides Funeral expenses, which is not assessed on the health of the individual and therefore provides an affordable product.

We also offer Postcode Annuities - which enable customers living in areas with higher mortality rates to benefit from higher pension payments.

We also highlight the 'Value of a Mum & Dad' with a survey undertaken by our protection business designed to highlight the hidden costs of losing a parent. Our media centre has releases on both the value of a mum and the value of a dad.

We have engaged Shelter to look at the issue of better household insurance in social housing where lack of cover can lead to clients resorting to borrowing from loan sharks. Shelter are educating us on the need for home contents insurance in social housing, and we are learning about the impact of households not having access to contents insurance

We also monitor increases in the amount we pay out on our products.