Our strategy

Our clear and consistent strategy utilises our capabilities, footprint and scale to serve the global savings and Asian protection needs of an increasingly self-reliant middle class to create long-term value for our customers and our shareholders. We focus on three markets, Asia, the US and the UK, where we see continued growing demand for our products.

CEO  report infographic

In Asia there is a growing and increasingly affluent middle class which by 2020 is forecast to become 1.9 billion people and represent over half of the global middle class. This group is increasingly wealthy but largely uninsured and has significant and growing savings, accumulation, health and protection needs.

The US baby boomer generation is the wealthiest demographic in the global economy. Over the next 20 years they will be retiring at a rate of 10,000 per day, creating significant demand for solutions to best help retirees with their retirement challenges.

The UK has an ageing population which remains under-saved for the long term. This will drive increasing demand for savings products and retirement income solutions which will provide opportunities for both life insurers and asset management.

To capture these opportunities we:

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Focus on customers and distribution

Our customers are at the heart of the decisions we make. We focus on understanding our customers’ needs and requirements in each of our chosen markets as we believe that in order to do well for our shareholders we must first serve our customers.

We consistently develop our product portfolio, designing it around our customers’ needs and providing them with peace of mind, whether that be in relation to saving for retirement or insuring against the risks of illness, death or critical life events. Satisfied customers become our advocates, recommending our products and services to their friends and families.

Distribution plays a key role in our ability to reach, attract and retain these valued customers across our regions. Building out and diversifying our distribution capabilities helps ensure that we fully capitalise on the opportunities available to us in each of our regions.


Leverage strength and scale, and proactively manage risk

Balance sheet strength and proactive risk management enable us to make good our promises to customers and are therefore key drivers of long-term value creation and relative performance. In spite of the challenging macroeconomic environment we continue to strengthen our capital position through generation of organic earnings and specific management actions, which since 2010 include:

  • Controlling sales of US variable annuities in a manner that appropriately balances value, volume, capital generation and balance sheet risk; and
  • Longevity reinsurance and asset portfolio optimisation in our UK life businesses.

Allocate capital with discipline, focusing on long-term returns

We rigorously allocate capital to the highest-return products and geographical locations with the shortest payback periods, in line with our risk appetite. This has had a positive and significant impact on our capital generative growing in-force portfolio and, in turn, has transformed the capital dynamics of our Group. For example, the free capital generated from our in-force operations reached £3.8 billion in 2015 compared to £2.4 billion five years ago (on an actual exchange rate basis). This transformation enabled our business operations to remit £1,625 million to the Group in 2015, compared to £1,105 million in 2011.


Provide balanced metrics and disclosures

We aim to have clarity and consistency internally and externally in the performance indicators that drive our businesses. Alongside this we develop our financial disclosures to enable our stakeholders to fairly assess our long-term performance. We have three main objectives:

  • To demonstrate how we generate profits under the different accounting regimes;
  • To show how we think about capital allocation via measures that highlight the returns we generate on capital invested in new business; and
  • To highlight the cash generation of our business, which over time is the ultimate measure of performance.

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How our business works


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