Setting new standards - Friends Life

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ANNUAL REVIEW CHAIRMAN’S STATEMENT GROUP CHIEF EXECUTIVE’S REVIEW ABOUT THE FRIENDS PROVIDENT GROUP UK LIFE & PENSIONS Chairman’s Statement I am delighted to report on another year of good progress for the Friends Provident Group. Last year, I pointed to the work we had done in rebalancing and reshaping the Group to enhance our growth prospects. In 2006, we have seen those prospects becoming reality across large parts of our business, and have extended our international reach still further. Our overall strong performance throughout the year is reflected in the financial achievements as presented in this Report & Accounts. Setting our sights still higher, towards the end of 2006 the Board set a new Vision for the Group, which is ‘To be the standard by which all other providers are judged’. We believe this properly reflects our desire and determination to take a lead in lifting standards in our industry and so help restore the confidence of consumers. This is vital. Our industry contributes so much, both to the economy as a whole and to the financial wellbeing of individual families, but needs to do more to earn the trust of those who place their confidence in our hands. Addressing this is rightly a priority, and we intend to be a leading light. In the UK marketplace, the focus of the media and the Government throughout 2006 has remained on pensions and the various options and opportunities for change. The widespread lack of long-term saving certainly needs to be addressed and we continue to contribute fully and effectively to the developing debate, primarily through the Association of British Insurers. Although the Government is preferring an alternative approach, we believe that the experience and expertise of our industry makes it uniquely placed to partner the Government in any eventual outcome. The increased attention on pensions, coupled with the greater clarity brought about through recent rule changes, has led to more activity generally in this market. As one of the leading providers, we have benefited significantly from this, with pensions accounting for 73% of our total 2006 new business in the UK. Overall, our share of the total UK market has risen to 5.5%, approaching double where we were when we became a listed company in 2001. Since that time, we have been able to increase the annual dividend for our shareholders every year, in line with our stated policy. For 2006, your Board is recommending a final dividend of 5.2 pence per share which would bring the total dividend to 7.85 pence per share, a 2% increase over 2005. Total Shareholder Return over 2006, which takes account of share price movements as well as dividends, was 19.0% compared with 14.4% for the FTSE 100 Index of leading shares. 4 Friends Provident Annual Report & Accounts 2006
INTERNATIONAL LIFE & PENSIONS ASSET MANAGEMENT GROUP FINANCIAL PERFORMANCE CONCLUSIONS AND OUTLOOK There are a number of changes to the Board to report. It is only right to start with the retirement of Keith Satchell who has been a magnificent Group Chief Executive over the past decade, skilfully guiding the Group through the most challenging, yet rewarding period in our long history. I know also that the industry acknowledges the significant contribution he has made, and continues to make, through his chairmanship of the Association of British Insurers, particularly with regard to the ongoing issue of pensions. In Philip Moore, we have an able successor to Keith, and the Board welcomes his appointment as the new Group Chief Executive. Jim Smart joined the Board in January this year from Boots Group plc and succeeds Philip as Group Finance Director. Alain Grisay became a Board director at the beginning of 2006, succeeding Howard Carter as the Chief Executive of F&C. Howard retired from the Board after the 2006 Annual General Meeting, and two long-serving nonexecutive directors, Christopher Jemmett and Lord MacGregor, will retire following the 2007 AGM. Finally, we are delighted to welcome formally Sir Mervyn Pedelty as a new non-executive director. On behalf of the Board, it is my pleasure to thank all of these directors, both past and present, for their advice and support to the Friends Provident Group. Last year, I pointed to the work we had done in rebalancing and reshaping the Group to enhance our growth prospects. In 2006, we have seen those prospects becoming reality. “ ” This year, our Annual General Meeting is on 24 May 2007. May I encourage all shareholders to vote on the resolutions being put forward at that meeting. I look forward to welcoming those of you who are able to attend in person. Finally, we were delighted to receive such a wealth of positive feedback over the way we restructured our Report & Accounts last year, presenting the detailed information in a more accessible way. We have retained broadly the same structure this year but with further minor improvements, which I trust you find helpful. Sir Adrian Montague, Chairman Friends Provident Annual Report & Accounts 2006 5
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Friends Provident plc Pixham End Do
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Setting new standards - Friends Life

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