Investing in Second Halfers.
I used to think L&G were simply another faceless life insurance, savings and investment company. I was wrong. They are a genuinely customer-centric business whose focus is looking after the needs, wants and aspirations of ‘Second Halfers’. They even put their own capital to work to enhance the quality and duration of human life.
Their purpose is: “To improve the lives of our customers, build a better society for the long term and create value for our shareholders. We use our long-term assets in an economically and socially useful way to benefit everyone in our communities.” And they mean it.
The fact that our societies are ageing fast underpins everything L&G does. Of course they do the sorts of things you would expect from a large life insurance and pensions firm – manging pensions on behalf of companies and offering a variety of products and services aimed at enhancing the ability of Second Halfers to save and manage their money. They possess a full range of active, ethical, multi-asset and index-related funds (at costs that range from 0.10% to 1.5% depending upon the remit of the fund), pension, retirement plans, insurance, equity release and lifetime mortgage products that you would expect from an international insurer and investment firm with more than $1.5 Trillion under management and more than 10 million customers.
But two things impressed me most about them. First that they have a Group Customer Champion as part of their top team, and secondly, they invest their own money in communities and specifically in meeting the needs of Second Halfers.
When I interviewed Chris Knight for You: Part Two, he was L&G’s CEO of Retail Retirement. He has since been promoted to Group Chief Risk Officer. He told me that the purpose of his division was not just to sell products to Second Halfers but to “help people to have good, ‘colourful’ retirements.”
I asked him about his other role as Group Customer Champion and wondered aloud if it was merely virtue-signalling. “Definitely not,” he replied. “It is a genuine role that is time-consuming and critically important. The remit of the Group Customer Champion is to literally be the voice of the customer in every Exec meeting – to make sure that every decision we make has the customer at its core.” To the uninitiated, this may sound obvious. It isn’t. Too many leadership teams fail to spend enough time considering the impact that their decisions are likely to have on the customer. Chris’ job was to make sure this did not happen at L&G.
In 2012, the senior team made a significant decision – to invest their capital in the real economy of the communities in which they operate, not only trade shares on the stock exchange. “If we aren’t going to invest in making this nation a better place, who is?” So, they built a team to invest their own capital in the real economy, outside of London, to create real jobs. The team has invested more than £26bn in jobs-creating businesses to date. Their target is £100bn.
As L&G Investment Director, Jess McCreadie, explained to me, they also invest in businesses aimed squarely at improving the lives of older people – eg Current Health, a remote healthcare business that enables doctors to monitor, manage and engage patients at home; and a genomic medicine business called Congenica. They are the investment partner in Guild Living, retirement villages situated in vibrant town and city centres, and they established the Inspired Villages retirement village group in 2017. L&G recently donated £5 million to Newcastle City Council to enhance elderly care in that city. It is a savvy and genuine provider, focused on Second Halfers and led by people who care.