Legal & General to withdraw from membership of the Association of British Insurers.
13 August 2014
Legal & General has informed the Association of British Insurers (ABI), that it will cease to be a member of the organisation at the end of 2014 (copy of letter attached).
Legal & General’s business has evolved over time, and now a large proportion of its business lines fall outside the remit of the ABI. In the future we believe engagement with government, regulators and other external bodies will be more individually tailored, and less suited to uniform representation through one trade body.
We believe the ABI plays an important role in public policy formulation for the sector, and in promoting best practice and codes of conduct across the sector. Going forward we would like to work with the ABI on these important issues.
Notes to editors
For further information, please contact:
Laura Doyle Head of Investor Relations 020 3124 2088
Stephen Thomas Investor Relations Manager 020 3124 2047
John Godfrey Group Communications Director 020 3124 2090
Richard King Head of Media Relations 020 3124 2095
Notes to editors:
1. Legal & General letter to the ABI
7 August 2014
Association of British Insurers
51 Gresham Street
Legal & General’s Membership of ABI
As you know Legal & General has been a member of the ABI for many years and has contributed extensively to its many forums and discussions. We recognise and have appreciated the invaluable work that ABI has achieved for the industry in setting codes of conduct and standards, representing the industry at UK and EU level and in raising
the general profile of the industry.
Following the recent change in the constitution and mandate of the ABI as a result of the transfer of investment business to the IMA, we have given considerable thought to the question of our continuing membership. This is a reflection of the fact that a large proportion of our business lines will fall outside of the remit of the ABI given that
the business of Legal & General has significantly evolved and in 2014 our business is now as much investment management as insurance. There is also a recognition that even within the insurance sector the ABI often concentrates, for understandable reasons, on the general insurance sector where as you are aware we have only limited business lines.
Additionally, our public policy work increasingly involves sharing commercial aspects of our business with government which, for very obvious reasons not least Competition Law, we cannot share with competitors. We believe that increasingly engagement with government, regulators, quangos and other external bodies will be on a case by case basis going forward and will have to be more individually tailored to individual company situations as business models of sector participants become more diverse and less suited to uniform representation through one trade body.
As a consequence, our view is that our shareholders’ and policyholders’ interests are best served through Legal & General engaging through a variety of interfaces rather than through one trade association and therefore we have decided to terminate our membership of the ABI (including the Life Insurance Council and the General Insurance Council) by serving notice with effect from today. I understand that pursuant to paragraph 11 of the Constitution that our notice will take effect at the expiration of four calendar months.
I suggest that it is more appropriate that I step down from the Board immediately and I will be notifying the Chairman of this.
We still believe the ABI plays an invaluable role in the public policy debates concerning important issues involving the sector and in evolving and promulgating codes of conduct for the companies within it. We would still wish to engage with ABI and its members on these and to support initiatives relevant to our business and to raising the profile of the sector generally. It would be helpful for our respective colleagues to discuss how arrangements for our continued engagement with ABI and its members on these matters can be put in place. I will ask the relevant colleagues here to make contact with their opposite numbers. Additionally, if there are any fees to be paid in respect of our membership up to the expiration of the four month notice period please invoice them in the usual manner.
In conclusion, this is a decision that has been made with much sadness given Legal & General’s long and historic involvement with the ABI. Nevertheless, we believe that our shareholders’ and policyholders’ best interests are best served by Legal & General terminating its membership at this time.
On behalf of the Legal & General Board, I wish you all the very best for the future, for the ABI and its continuing membership.
With Kind Regards
Group Chief Executive
Legal & General Group Plc
CC Paul Evans – Chairman, ABI
2. Legal & General Group Plc
Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £13.4bn (as at 30th June 2014) and is responsible for investing £465bn worldwide (as at 30 July 2014) on behalf of investors, policyholders and shareholders. We have over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2013, Legal & General's profits before tax (on the IFRS basis) were £1,134m and earnings per share were 15.20p for the period, an increase of 10% for both respectively.
For more information on Legal & General, please see http://www.legalandgeneralgroup.com/
Forward looking statements
Nothing in this announcement should be construed as a profit forecast. This document may contain certain forward-looking statements relating to Legal & General Group, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General Group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this document or any other forward-looking statement it may make.