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Legal & General Customer Experience Report 2007

Welcome to our first Customer Experience Report. We have produced this as part of our commitment to the Association of British Insurers' Customer Impact Scheme.

In our report you will find information on our Customer Experience programme and why we joined the scheme, along with three case studies to demonstrate our progress against the Customer Impact Scheme commitments. We have also taken a look forward to the things we will be doing over the next year in our Customer Experience programme.

Please let us know if you need the report in another format such as Braille or audio tape. We would also like to hear from you if you have any comments or feedback on our report. Please email any requests or comments to us at websitefeedback@landg.com

The Customer Experience Report has been verified through our Group Internal Audit processes and procedures.

Background

Customers are at the heart of our business, and we continually strive to meet the demands and challenges of delivering the products they want, and need, in order to grow our business in a sustainable way.

We are committed to working with our regulator, the Financial Services Authority, on their Treating Customers Fairly work, and the Association of British Insurers (ABI) on initiatives such as the Customer Impact Scheme. We firmly believe they both play a vital part in boosting consumer confidence in the long-term savings and protection market.

Our Customer Experience Programme

Employees, customers and advisers want to join us, stay with us and recommend us

Launched in March 2005, this is the vision for our Customer Experience programme which we believe is making real progress towards delivering a positive experience for all our customers.

What customers expect

In order to really understand our customers we run an extensive customer research programme. During 2006 we conducted around ninety market research projects to get feedback on how our products and services are viewed by existing and potential customers and advisers.

As part of this research programme, we have taken part in research to understand what customers want and expect from the companies they deal with¹. Customers are telling us that:

Conducting business ethically
Treating our employees fairly
Treating customers well

are the top three issues for Legal & General to focus on. We have used these insights to shape our Customer Experience programme and to influence our Corporate Social Responsibility activities.

¹ Mori CSR research 2006

Employees

Employee training and communication are key elements of our Customer Experience programme. During 2006, over 4,500 employees attended workshops to engage them in learning more about their role in improving the experience they give our customers.

Our Ideas in Action programme, which has now been running for over two years, encourages employees to give us their ideas on how service can be improved. It has gone from strength to strength. In 2006, over 3,000 ideas were put forward with over 600 already making a difference to the way we work. We also received a strong endorsement for the way employees are involved in improving customer service by winning four trophies at the independent annual ‘ideasUK’ awards.

Customers

When things go wrong it is important to us that we put them right in a way that encourages customers to stay with us and recommend us. One of our Customer Experience projects has focused on improving how customers feel about us by delivering improvements to our complaint handling process. In response to what our customers told us, we have developed and delivered our ‘Complaints Operating Principles’ across the UK Business.¹

Our Principles include:

providing

Someone to listen to them
An apology
Someone to own their problem
People who know what they are talking about

ensuring

They are not passed around
That problems get put right quickly
They are kept informed

¹ ICM Research 2006

Advisers

Our Business Partners are a very important link with our customers. As part of our Customer Experience programme we feel it is important to make sure that they get a positive experience by ensuring that our messages are relevant and go to the right people. Using a mixture of external research and internal reviews, we have implemented a number of improvements to our communications. These have resulted in extremely positive feedback in our Business Partner satisfaction survey.

Our improvements include:

Appointing a 'gatekeeper' to review everything that we send out
A new magazine for sales messages
Making it clear when our emails are urgent
Focusing messages on the people who really need them

Joining the Customer Impact Scheme

Our customers buy pensions, protection and investment products for many reasons. One of the most important is to provide peace of mind through financial security for themselves and their families. But real peace of mind only comes with confidence. Confidence they are dealing with a company with a strong brand and reputation; one that is committed to driving up the experience of its customers.

This is why Legal & General was at the leading edge of the design and launch of the ABI’s Customer Impact Scheme in 2006; why we are proud to be associated with it; and why as a company we are committed to the scheme.

Our Group Board has made a formal commitment to put customers’ interests at the heart of the way we run our business. We were one of the first companies to sign up to the Customer Impact Scheme, adopt the Customer Commitments, and take part in the Customer Impact survey.

This is an exhaustive, unbiased measure of how well customers feel they are being treated by the pensions, protection and investment industry.

Legal & General is already demonstrating its commitment to making the interests of its customers a pivotal part of its business.

We are already delivering on these commitments, for example, by developing and following our product development model, which breaks this important process down into stages, we ensure everyone (especially our customer) is consulted.

By following this model we strive to produce:

Products and services shaped by listening to our customers through research
An understanding of what is important to customers
New products that do not come with hidden risks or technical conditions
Products that are easily explained to our customers
Continuous improvement to the quality of our service

We believe that our involvement with the ABI’s Customer Impact Scheme complements the work we have been doing through our Customer Experience programme and will make a real difference to our customers. In our first Customer Experience report we have chosen three case studies from our programme to demonstrate our approach to the three Customer Impact Scheme commitments.

Commitment: developing products that meet customer needs

Helping customers protect their families

We all know parents are priceless, but if they cannot be there for their children, most people want to ensure their family does not face financial hardship.

Raising children is not cheap. Legal & General’s Value of a Mum survey found the average cost of raising a child is around £122,859! Most people under-estimate the cost of bringing up a child, and prefer not to think about their own mortality.

All of which means that even if they have a wonderful family (parents, aunts, brothers and sisters) all willing to offer their child a good and loving home, the cost of bringing up an extra child could leave their child’s guardian with a shortfall of around £450 each month.

Families in the UK are generally under protected against the uncertainties of life. They are under insured against issues such as ill health, death, serious illness or loss of income. So we decided to ask our customers ‘Why?’

In almost a thousand research interviews in different regions throughout the country, we asked parents of children under 15 what they thought about providing financial security for their children. This, along with other customer insight told us that consumers:

Prefer not to think about not being around for their children
Think that if the worst happens their family would help
Under-estimated the costs of raising children
Think they are too busy
Do not always have an IFA to advise them
Think that insurance could be expensive

Our research was a key element in the development of the Family Life Insurance Plan. This is a new product designed to provide financial support for children until their 21st birthday after the death of one or both of their parents.

Family Life Insurance Plan is:

Simple and easy to apply for: no medical underwriting is involved at point of sale
Affordable for every budget: customers can choose how much life insurance they buy (Cover is available from as little as £4 per month)
Straightforward: simple rules about when the policy will pay means customers are not left worrying whether a condition will be covered, or whether they have disclosed all the relevant information when they filled in the application form
Fair: customers with past health issues can buy insurance at the same price as everyone else, because they are covered for new medical conditions immediately (In these circumstances they can’t claim for the first five years of the policy if they die as a result of an illness they have had before)

Then we went back to our customers; asked them what they thought; tested our ideas; showed them the sales materials we had developed and checked their understanding of the terms and conditions. The results were very positive.

They liked the simplicity of the product. We made some small changes to our materials, to reflect their views, and started to market Family Life Insurance Plan through The Children’s Mutual. They are one of the largest providers of child trust funds in the UK, with a customer base of young families.

Getting people to think about an issue that may be important, but few want to think about, can be a challenge. We believe the Family Life Insurance Plan addresses a real customer need, by helping people to cover themselves for the financial impact of potential future events.

¹ SwissRe, Term and Health Watch Report, 2006

² Protection Gap. SwissRe estimates the UK population is under-protected by £2.3 trillion. SwissRe, Term and Health Watch Report, 2006

Commitment: clear information and good service at point of sale

Access for all

We believe treating our customers fairly is not simply about combining good quality products with high levels of customer service. It is about being open, clear and accessible to all of our customers, ensuring they have the help and support they need – at a time that suits them.

For many Legal & General customers, the internet provides an ideal way to discover more about important financial services issues and products. But for people with disabilities, accessing, navigating and reading the content of a web page can be impossible if the information is not presented correctly.

The Disabilities Discrimination Act suggests that all websites have to be accessible to users with disabilities. We have taken that requirement as an opportunity to increase access for all. Not simply to comply.

That is why there is a whole new look to our website at www.legalandgeneral.com.

In the last year, we have worked closely with the team at the Shaw Trust, a national charity internationally recognised as a leading authority on disability, disadvantage and employment. Their advice has been invaluable. Since working with them, Legal & General’s website has been through:

A comprehensive technical audit
An extensive series of pan-disability tests conducted by a panel of experienced disabled users
A re-design

As a result, we are proud to be the first financial services company in the UK to receive Accessibility Accreditation from the Shaw Trust. We are also delighted that the improvements we have made are not just about helping customers with disabilities, they will benefit all our customers.

Legal & General has become the first company in the financial services sector, as well as the first FTSE 100 company in the UK, to achieve Accessibility Accreditation for its website from the Shaw Trust.

The Guild of Accessible Web Designers recently voted Legal & General’s website 'Accessible site of the Month' for the financial sector (January 2007).

Improvements at a click:

No more second level drop-down menus, making the website more accessible to screen readers and search engines
Contact Us facility which means customers can navigate their way to wherever they want in just two clicks. Content on any product can be accessed from our homepage in two clicks, ie Investments, ISAs gives details of all our ISAs
No more jargon
Crystal clear about what can and cannot be bought online
Quicker and easier to get a quote or apply for a policy online
Easier to find information customers told us they are really interested in
More efficient and faster

Case study

We are not just making improvements to the design of our website.With a customer’s permission, help is just a mouse-click away. Legal & General’s new ‘GoToAssist’ is a secure, live, help facility that enables a Legal & General customer service adviser to provide real time help and support. Once our customers have given their permission, our advisers can look at what is on their screen and ‘share’ control of their mouse and keyboard. The team can then either talk the customer through their issue, or highlight things for them on the screen so that they get help quickly and easily.

Our vision is to ensure equal access for all to Legal & General’s website. To achieve this, we are continuously striving to improve. As well as maintaining our current standards, one of our key goals is to achieve the standard required to meet the RNIB’s ‘See It Right with Usability’ guidelines.

Increasing accessibility

www.legalandgeneralgroup.com is currently being tested for the Royal National Institute for the Blind’s (RNIB)/AbilityNet’s ‘See It Right with Usability’, the definitive international guidelines for building accessible websites
Legal & General’s consumer website, Legal & General’s consumer website, is being tested by both Shaw Trust and the RNIB/Abilitynet
For more information about Legal & General’s commitment to increasing accessibility, visit http://www.legalandgeneral.com/accessibility.

Commitment: maintaining effective and appropriate relationships with customers

Our Bonus Communication

Most customers are not interested in financial jargon, but they are interested in whether they will be able to afford to live comfortably in the future. Information about the investments that will fund that future is incredibly important.

The nature of investments means we often have a long-term relationship with our customers. This is an important relationship, sometimes involving complex products. It is one where the information we send, and the decisions they make using that information, could significantly affect their financial future.

It is also information some customers have told us they find quite complicated, and sometimes confusing. This is why it is so important for us to help our customers understand how their investments are performing by providing information in a clear and easily understandable format.

As part of our ongoing programme to improve communication with our customers, Legal & General commissioned independent research to understand our customers’ views on some of the most important information we communicate to them every year – their bonus statements.

Customer bonus statements are an annual account of how their With-Profits investment with Legal & General is performing. It tells customers how much their policy is worth and how much bonus has been added for the previous year. Each statement also explainshow the different investments we have made have performed in the last twelve months.

In 2005, our customers told us there was:

Too much information in their bonus pack
Not enough information about the value of their policy
No sense of being thanked for their business
The bonus letter did not have a very friendly tone, although the length and volume was about right

So, in 2006 we:

Revised the information sent to all With-Profits customers
Switched to a warmer, friendlier tone in our letter
Made it clearer how they could find their policy value
Used charts and graphs to explain the information in ‘Keeping You Updated’
Showed customers how to calculate their bonus, using a worked example
Made the questions and answers simpler and easier to understand
Renamed With-Profits News to ‘Keeping You Updated’
Used less words on each page in our leaflet
...and said a big ‘Thank You’ to our customers for their business

To prove we were really listening, we went back and listened to our customers again in a series of face-to-face conversations. They told us:

They liked the length and tone of the letter
The statement achieved its objective of updating them on the progress of their policy

But

There was still some jargon
They were still confused by some of the terms

And

They want their Bonus information pack to be as brief as possible
They want as much Plain English as possible

... As a result

We are using our customers’ views to make further improvements to this year’s literature. The letters and statements we are sending out during 2007 will be based on what customers told us during the research. As well as pulling out key contact information, they will also make it clear to customers, at a glance, if they need to take any action.

We have changed the way we provide customers with important information about their policy. They told us they found our ‘Keeping You Updated’ magazine difficult to understand and too long. This has now been discontinued and customer information will be included in a Frequently Asked Questions section. Customers who want more information will be able to request a copy of our 'Bonus Factsheet' by visiting the Legal & General website or phoning us.

Of course, we are still actively listening. We will go on making improvements to this and other communications.

Looking forward

Our Customer Experience vision is: Employees, customers and advisers want to join us, stay with us and recommend us.

Creating the right culture

This will continue to be the Customer Experience vision that guides us over the coming months. We intend to continue to develop and embed our Customer Experience programme right across our business. Our goal is to create and support a culture that puts the customer at the heart of everything we do in our business.

Our award winning Ideas in Action programme will continue to support an environment in which employees can put forward ideas to improve the way we create the right experience for our customers.

Managing and developing our products

We will continue to refine and use our Product Development Model to manage and develop our products and take a proactive approach to reviewing our existing products, ensuring that we have considered the entire product lifecycle from our customers' perspective.

Helping customers choose the right products

We recognise that the way we sell our products and the advice we give to our customers is a very important part of their experience of dealing with us. We will do further work on defining the role of our advisers and look at how we monitor the quality of their advice through a combination of customer research and internal review.

Delivering the right service to our customers

Once a customer has bought one of our products the service they receive is an important aspect of their experience. We want to deliver quality services that meet our customers' expectations. Our Service Review team will work with areas from across the business to help shape our services by listening to customers and understanding what is important to them. They will continue to help redesign processes so that we are easy to do business with.

Our service reviews will run alongside work to look at how we can improve the way we respond to customers who complain to us, and how we use their feedback to understand and address the causes of their frustrations.

Talking to our customers

Customer communications will continue to be a major area of activity over the next 12 months. Based on internal and external research we have developed a style of language that we believe will make it easier for customers to understand us when we talk to them. This is part of a long-term commitment to improving our communications. This commitment involves training employees in addition to significant investment in the systems we use to produce our letters.

Listening to our customers, and then acting on what they say, underpins our Customer Experience programme. In addition to running our customer research programme, and offering our customers the opportunity to give us instant feedback at the end of a phone call, we will share with our Group Board key measurements on our progress and successes against our Customer Experience vision.

Thank you

Thank you for taking the time to read our Customer Experience Report.