2019 Review: A message from our Executive Chairman
I am delighted to report that 2019 was a record year for the Lombard International Group, delivering €5.7 billion of premium income. Group Assets Under Administration (AUA) are also at an all-time high of €48.4 billion and have more than doubled in size compared to the AUA of the combined businesses a decade ago.
These results demonstrate our continued market leadership positions in Europe and the US, in addition to gaining further market share in Latin America and growing the brand in Asia. This great achievement is testament to the unwavering commitment and hard work of our expert teams across the globe. It also reinforces our long-term strategy of continued investment in building a sustainable business that serves our clients around the world.
Our strong performance has been delivered despite significant geopolitical and economic headwinds across the globe, in which no region escaped unscathed. The UK exit from the European Union; an escalating trade war between the US and China; mass protests in Hong Kong; and, the ‘Latin American Spring’, represent just a handful of events that led to heightened caution and uncertainty in 2019.
While no one is immune to the challenges presented by socio-economic instability, these also represent considerable opportunity for our business as we seek to safeguard the wealth of our high net worth (HNW) clients, their families and institutions. Our solutions have never been more relevant than today, as HNW individuals with global interests and sophisticated investment needs must navigate the complex cross-border regulatory and economic environment. We are relentlessly committed to sourcing and investing in the best global expertise and talent to deliver specialist wealth structuring solutions and service excellence to our international clients.
2019 financial performance highlights
In 2019, Lombard International Group delivered a record result, both in terms of new business flows and AUA. Our foundations remain strong and we continue to maintain financial discipline. In 2019, the Group was awarded financial strength ratings by AM Best and Kroll Bond Rating Agency (KBRA). AM Best reaffirmed its rating of A- (Excellent), and KBRA reaffirmed an insurance strength rating of A. These ratings reflect our strong position in the European and US unit-linked life assurance markets, driven by our deep expertise across multiple jurisdictions, our continued investment in technology, and the strength of our balance sheet.
In Europe, we had an excellent year as all functions across the business worked tirelessly together to deliver a 24% year-on-year growth in new business inflows. We established LIA Wealth Advisers Ltd., an FCA approved UK entity, to ensure we can continue providing our UK clients and partners with excellent service regardless of the Brexit negotiations. We also launched LIA Patrimoine, a regulated broker in France, thus creating an efficient entity to sustainably serve our growing network of partners and intermediaries in France.
In the United States, our business delivered an outstanding 27% year-on-year growth in new business premium income thanks to the efforts of our expert team. We invested to further enhance our partnership model, which allowed us to improve efficiency and fully leverage our unique technical expertise, including our robust and flexible operating capabilities. We continue to build on the success of our Group Variable Annuity, a solution that enables institutional investors such as pension funds, foundations and endowments to streamline administration of their investments.
It is encouraging to see our business and brand presence continue to grow in Asia. In 2019, we invested meaningful resources into the region which helped to further establish our footprint in this growing market. At the same time in Latin America, new business grew substantially. This growth was enabled by our trusted network of local partners in various countries around the world.
Our strategy is clear - the Group remains focused on building a globally diversified and balanced business driven by multiple engines of growth in Europe, the US, Asia and Latin America. It is pleasing to see that both Europe and the US delivered double digit premium income growth in 2019, as the diversification of our revenue streams also continues to improve. Europe, our largest region, is a great example of this; we have seen strong performance in France and the UK, alongside the traditional stronghold of Italy. As a result, premium income in Europe is more diversified than ever before.
We pride ourselves on having a strong and diverse footprint, with a physical presence in 16 cities across the globe, serving more than 20 markets. We remain laser-focused on the key global wealth hubs including Switzerland, London, New York, Hong Kong and Singapore that are epicentres of HNW capital flows and thus are pivotal to Lombard International’s continued business success. With experienced personnel on the ground in each location, the Group is able to foster local, strong relationships with asset managers, brokers, custodian banks, private bankers and wealth planners.
A commitment to service excellence is deeply embedded in our corporate DNA. It defines how we run our business, how we structure and incentivise our teams, and how we communicate internally and externally. We are extremely proud to be receiving very positive feedback from our partners and clients about the industry ‘best-in-class’ standard of service that Lombard International delivers. This would not be possible without our expert multi-lingual client services teams who have a deep understanding of our clients’ needs and work relentlessly to streamline processes, improve efficiency and enhance the quality of our service.
Our people are at the heart of delivering service excellence to our partners and clients. They work in tandem with our digital capabilities, which enable the simplification and automation of cumbersome processes. For example, our online platform in Europe, Connect, allows our partners and clients to access policy details, valuation statements and have secure, direct chat conversations with our client partner services department.
To ensure Lombard International Group continues to evolve our technology, we have streamlined our Information Technology (IT) structure by creating the Global Office of Technology and Transformation. This brings together the Group’s IT and Project Management resources and talent from across the global business into a single unit, to further enhance the support of the Group’s business development plans and longer-term growth initiatives.
Strong leadership and succession planning to underpin sustainable future growth
Following a strong performance in 2019, and as the Lombard International Group continues to grow our leadership position in Europe and the US, we are pleased to announce that Stuart Parkinson has been appointed Group Chief Executive Officer. He will commence his role and join the Board of Directors on 1 April 2020.
Stuart has over 27 years of international experience in banking and financial services and has worked across Asia, Europe, Latin America and the US. He has significant experience in managing diverse teams and businesses, bringing resources together across multiple geographies to enhance propositions to best serve clients. Stuart will bring great energy and fresh thinking as we expand our distribution footprint internationally.
As part of the Group’s succession plan, I will assume the role of the Executive Chairman. I am excited about this transition, which will enable me to focus my time on new strategic initiatives, product innovation and further strengthening the brand of the Group globally.
In 2019, the team delivered outstanding results for our partners and clients. In 2020 we will continue to further enhance our business strategy, focusing on further global integration and new opportunities. We will drive innovation and positive change.
What will not change is our focus and discipline. We will continue to work tirelessly to fulfil our purpose of making legacy count. We seek to protect and preserve the wealth of the individuals, families and institutions that we represent, to ensure that it can be passed on. Whether championing philanthropic causes, growing a family business so that it may continue to offer employment in local communities, or deploying capital to fund the innovation that will create the solutions to our most pressing global challenges, we look after our client’s financial futures so that they can concentrate on the footprint they wish to leave behind.
I am proud of our accomplishments last year, and I look to 2020 with complete confidence. I am forever grateful to be working with such a talented, dedicated, resourceful, and creative team. We have the right people in place, the right capabilities, and the right mindset to act with conviction, adjust with humility, and continuously improve.
John K. Hillman
As of 31 December 2019