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We are, primarily, a UK business and despite the current downturn, we believe that the UK still has growth to offer us. We have an ageing population and this is structural pressure on people to make better provision for retirement.
As a country, we were under-saved and under-protected, as we entered this downturn. And I believe that one effect of the recession will be to focus people's minds increasingly on savings, particularly as the public finances look increasingly strained.
The decade of debt, I believe, is over and there will be a new decade of prudence. Savings will, initially, probably be short term and precautionary but for those who can save and who preserve their savings through the downturn, the focus is likely to be increasingly long term: the area where we focus our business.
Meanwhile, on a five- to ten-year view, we are augmenting our existing overseas businesses by selectively entering new markets, such as India and the Gulf states. We choose those markets carefully. We look for a ‘savings’ culture, for clear opportunities to increase the penetration of our products and for political and regulatory stability. And we look to enter the market in a low-cost way, in conjunction with strong local partners with established local distribution. Bank of Baroda and Andhra Bank, our partners in India, and Ahli United Bank in the Gulf meet those requirements precisely. And we are making good progress in getting our joint ventures established in both regions.
Although our approach is cautious, the potential upside is considerable, and over the next few years, these initiatives could herald a new phase of international growth for Legal & General.