Message from our Executive Chairman
Lombard International enjoyed another year of record growth in 2017. This success is due to the exceptional work of our entire team, working closely with our partners across the world.
As I have shared in the past, significant wealth comes with great responsibility. For wealthy individuals this manifests in a number of ways. First, they feel a great responsibility towards past, present and future generations. Second, they remain committed to the communities in which they live, work and contribute. According to the Wealth-X and Arton Capital 2016 Philanthropy Report, ultra-high net worth individuals will donate an average of US$30 million over the course of their lifetimes - a remarkable commitment. Just as our clients have a responsibility to their families and communities, we at Lombard International have a responsibility to help preserve and protect their wealth, to empower them to achieve their goals and ambitions for generations to come.
We remain committed to listening to our clients and partners, leveraging our unparalleled expertise to develop the bespoke, robust and flexible solutions required to effectively manage our clients’ wealth now and in the future.
The world is becoming increasingly globalised and so is the nature of wealth. At Lombard International, we have embraced this paradigm by ensuring full connectivity across the globe. We have achieved this by continuing our investment in global expansion to deliver smart and agile solutions underpinned by talented experts based in our core centres in Asia, Europe, Latin America and the United States. We believe we are unique in our ability to provide an integrated global perspective to best serve our clients and their advisors, no matter where they reside.
In 2017, we accelerated our growth by further expanding our footprint in Asia via our hubs in Hong Kong and Singapore. We continue to evaluate other opportunities in the region for expansion into new markets which have access to a growing high net worth population.
In Europe, we serve over fifteen core countries supported by specialists with local knowledge and expertise in each jurisdiction. We also built upon our existing asset base in Europe by signing an agreement to acquire a portfolio of life insurance policies from HSBC Life Assurance (Malta) Ltd.
In Latin America, our joint venture with Akaan in Mexico is progressing well and we are working closely with the local regulator to launch our new life insurance company later this year.
In the US, we strengthened our offering by redefining the way we support the market. We have segmented our business into three distinct channels: independent agents, financial intermediaries, and institutional investment managers. Each channel now has a tailored team of professionals focused on providing the best service and solutions to this growing and important marketplace.
We are delighted that among our accomplishments in 2017, we received recognition from leading ratings agencies. Kroll Bond Rating Agency assigned an insurance financial strength rating of A to Lombard International’s key operating companies and A.M. Best affirmed its A- (excellent) rating on Lombard International’s U.S. operating companies. We are proud to have received these ratings, which both reflect our record growth and signal our position as a leader in our market.
Lombard International was also awarded the ISO 27001:2013 certification for our Information Security Management Systems, the internationally recognised standard for information security management systems. The accreditation underscores our commitment to protecting the data of our clients, which is particularly pertinent in the wake of the General Data Protection Regulation (GDPR) coming into force this year. Additionally, it highlights our ability to successfully manage internal controls and meet the highest governance and business continuity standards.
During the latter half of last year we took the opportunity to review our global financing arrangements. I’m delighted with this outcome and I was particularly pleased with the calibre of the financial institutions that had chosen to participate in the debt raising. These funds provide flexibility to further invest in our growth markets, retire existing debt, and provide for general corporate purposes, which may include strategic acquisitions or capital contributions to Lombard International’s insurance operating companies.
A major achievement for Lombard International in 2017 was the successful launch of our SPIRIT values. These were identified as being at the heart of our culture, and what drives us to be the best in the business. The acronym stands for: Soul of a small company; Passion; Integrity; Respect; Innovation; and Teamwork. We have experienced exponential growth over the last few years and are proud to identify with values that define our business ethos.
Our people are at the core of our business, and their unrivalled expertise across multiple markets and functions is what enables us to offer our clients best-in-class solutions and retain our market leading position.
Having made a number of significant appointments throughout 2016, we continued to bolster our senior leadership team:
- Paul Upchurch has joined as Chief Operating Officer, Europe and has hit the ground running by driving efficiency in our day-to-day operations across the business.
- Sandra Locke was named the Global Director of Human Resources and is focused on uniting our talent across all our businesses whilst fostering a strong company culture.
- John Fischer was recently named as Executive Vice President, Head of US Distribution to further develop our sales initiatives in this key market.
- Monica Risam was appointed General Counsel, Europe to lead a multi-disciplinary team responsible for ensuring the provision of commercial and corporate services and advice to our European business.
Diversity is key to our success. Our team of approximately 600 includes 40 different nationalities speaking 27 native languages across 20 markets around the world. This global connectivity, supported by the expertise of over 60 technical experts, means that we are able to provide high quality wealth planning solutions combined with a deep understanding of local cultures and attitudes.
We understand that the needs and service expectations of both our partners and end clients are changing in this digital age. To this end, we remain focused on driving innovation in every aspect of our business, including the development and implementation of new digital capabilities.
Over the course of 2017, we accelerated our digital offering through the advancement of our ‘Connect’ platform in Europe. We launched a number of new features and the platform now enables partners even greater ability to oversee and manage policies securely and online.
In the US, we introduced an online platform which provides partners with live access to portfolio information, performance and educational material, readily available from any device. We have also launched an online enrollment portal which provides clients and partners with the ability to apply online for a number of Lombard International insurance products, providing a simple path from start to finish.
Our 2017 financial performance*
Our financial results reflect the value we continue to bring to our clients and partners with sustained growth in new business and a robust increase in assets under administration.
These results also reflect continued investment in new initiatives designed to enhance our wealth solutions, services and capabilities across the globe. These investments will drive higher sustained growth over the longer term.
- New Business Premium: Total new business premium written was strong at €5.0 billion, which is a new record in the Company’s history.
- Assets under Administration (AUA): Total AUA grew to €74.3 billion (as of 31 Dec 2017), an increase of €3.4 billion or 4.8% from €70.9 billion in the prior year:
- The High Net Worth AUA totalled €41.2 billion (as of 31 Dec 2017), an increase of €2.9 billion or 7.6% from €38.3 billion in the prior year.
- The Corporate Administration AUA totalled €33.1 billion (as of 31 Dec 2017), an increase of €0.5 billion or 1.4% from €32.6 billion in the prior year.
We are building a business that is truly unique. We have the strength of brand, talent and resources to significantly scale and evolve our offerings through growing our global footprint, strengthening our distribution channels and expanding our digital capabilities.
There has never been a greater need for our solutions. Our multi-jurisdictional expertise, agility, and eagerness to tackle complex problems mean that we remain a provider of choice. We have unequalled in-house specialist knowledge and capability to manage the challenges of near constant changes to regulation, and an ever greater emphasis on wealth longevity and the increasing social responsibility of our clients.
The pace of change is rapid, and we have moved into 2018 at a sprint. Our focus, however, remains on the long term to develop customised solutions to complex problems in a connected world for our business, our partnerships, and, of course, our clients.
I would like to take this opportunity to thank our partners, clients and colleagues for their continued support, and look forward to sharing in the opportunities and successes that 2018 will bring.
John K. Hillman
(*) New business and assets under administration are presented at constant currency rates as of 31 Dec 2017