OUR THREE-YEAR STRATEGIC PLAN.


During 2011 we have undertaken a strategic review to develop our three-year strategic plan for 2012 to 2014.

Our overall aim remains unchanged.

To build a company which every single day, becomes even better at serving customers and rewarding shareholders.

OUR STRATEGIC OBJECTIVES

We are pursuing a strategy based around:

CUSTOMER AND BRAND

Cultivating deeper customer relationships and building a highly recommended brand with a strong social purpose. Developing our capabilities to benefit from digital technology.

OUR AIMS

HOW WE WILL ACHIEVE THIS AND MEASURE OUR SUCCESS

Develop a two-way dialogue with all customers (individuals, intermediaries and institutions).

Improve customer communications and upgrade our Group-wide customer relationship management system.

Build a strong social purpose and relevance to society.

Differentiate ourselves through market leadership in social responsibility, achieving an improvement in the number of people who view our brand as relevant to their needs.

Cultivate deeper customer relationships.

Focus on understanding our customers’ needs and foster lifetime relationships. Achieve an improvement in the number of people who prefer our brand to those of our competitors.

Be recognised as a brand that people proudly recommend.

Build a brand that our customers value highly, by improving customer outcomes. Achieve an improvement in the number of customers who would recommend us to others.

Broaden distribution channels.

Complement our existing advice distribution channels with an improved ability to meet the needs of customers who want to deal direct.

CAPITAL MANAGEMENT

Developing new capital plans to meet Solvency II requirements and our cash flow and return on equity targets.

OUR AIMS

HOW WE WILL ACHIEVE THIS AND MEASURE OUR SUCCESS

Continue our proven track record in enhancing shareholder value.

Achieve at least a second quartile position among FTSE 100 companies for [total shareholder return].

Increase the cash generation and the certainty of that cash generation whilst optimising our capital structure.

Develop plans to increase cash generation and maximise the efficient use of capital.

Execute our capital allocation plans, including asset liability management, capital restructuring and project expenditure.

Amend our risk appetite strategies and economic capital development plans.

Deliver a positive Solvency II outcome that protects consumer interests and establishes realistic capital bases.

Work with industry bodies to help regulators and government achieve a positive Solvency II outcome.

Deliver strong return on equity.

Achieve a market-leading Group return on equity.

ORGANISATIONAL CAPABILITY

Building a more productive, engaged and efficiently managed organisation.

OUR AIMS

HOW WE WILL ACHIEVE THIS AND MEASURE OUR SUCCESS

Build a more responsive organisation.

Modify the shape of our organisation so that it maximises efficiencies while encouraging the development of talented people.

Create a more productive organisation.

Foster greater staff engagement and motivation levels. Improve the efficiency of administrative processes.

Develop a recognised management capability in driving the organisation towards its goals.

Develop the capabilities of our management and improve ist effectiveness.

Foster an engaged and committed workforce who actively contribute to increasing Company value.

Ensure that our people remain engaged and committed. Maintain the staff engagement index from our current level.

DIVERSIFICATION

Diversifying our mix of business by growing our international footprint and developing new markets in established businesses.

OUR AIMS

HOW WE WILL ACHIEVE THIS AND MEASURE OUR SUCCESS

Develop a more diversified business.

Achieve a more balanced use of capital in developing our four businesses.

Reduce our dependence on traditional markets.

Diversify our offerings in all of our businesses through developing new products and widening our customer reach.

Increase our international footprint.

Where our scale and expertise offer us an advantage, we will work to expand our LGIM and International businesses.

UK GROWTH

Growing our market-leading savings, risk and investment management businesses in our core market.

OUR AIMS

HOW WE WILL ACHIEVE THIS AND MEASURE OUR SUCCESS

Grow number of customers, in-force premiums, assets under management and net fund flow.

Deliver UK growth through entering new markets and extending our customer reach.

Identify new markets.

Identify those markets where we can launch new products or target a much wider range of customer groups.

Create new products that respond to changing customer needs.

Maximise opportunities arising from reform of the welfare state and workplace pensions.

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