ROYAL Liver’s membership will in the next 48 hours vote on a board proposal to consign the mutual to the history books by merging with rival Royal London.
For more than 160 years, the life assurer has played a major role in the economic history of the city from which it took its name. Its head office, the Royal Liver Building, has become an icon, as have the mythical birds atop it.
The votes are to be cast at the Royal Liver’s marathon four-day (161st and probably last) annual general meeting, taking place this year at St George’s Hall. Yesterday, 200 delegates representing 900,000 members spent all day discussing the annual report and accounts.
I once attended Shell’s AGM. Despite the fact the oil company is much bigger, its AGM took just two hours from start to finish, including the bit when the police arrested the anarchists. Today, Royal Liver’s delegates will debate voting procedures, then tomorrow they will actually vote. Goodness knows what they plan to do with Friday.
It all begs the question who has got the time to spend four days at an AGM? It gives the impression of an organisation hidebound in tradition and arcane, archaic governance processes; in other words, an institution unlikely to modernise and face up to today’s ruthlessly competitive and fast-moving world of financial services.
Over the past 10 years, Royal Liver’s performance has been one of marginal profitability. On the other hand, while Royal Liver hasn’t been very profitable, it hasn’t been a financial disaster either – you couldn’t lump it in the same category as Equitable Life. It could, in all probability, limp on for many years yet, but management have decided it’s time to throw in the towel.
Three factors have come together to work against it. A failure to compete in the market place has been matched by volatile investment markets and ever tighter regulations governing the solvency of financial service providers. The goal posts have been moved.
These days, an increasingly financially sophisticated consumer market place is more interested in which savings and investment products give the best returns, rather than the principle of mutuality. The mutual principle served a wonderful purpose in past times, but we are no longer so anxious about saving to ensure a dignified funeral as poor Victorian Liverpudlians once were.
The board has a duty to conduct the business of the society along prudent lines. Weak investment returns and a decision to close the life book to new members effectively pulls the rug from under the business model. A lack of new members means lower revenues, which in turn makes the maintenance of a significant overhead at head office unsustainable. As a consequence, there is only one rational outcome to tomorrow’s vote, Royal Liver must cease to exist.
THE Metquarter stole a march on Liverpool One, opening two years before the £1bn development.
The phrase credit crunch hadn’t been coined and the Whitechapel shopping centre filled up with tenants. Now, retailers like Flannels, Hobbs, Coast and Whistles have quit the Metquarter in favour of the much bigger Liverpool One, which has proper anchor tenants drawing in the crowds.
As a result, the Metquarter is now 25% unlet. Yet, just 200 yards away, Forever 21 is taking space at the junction of Church Street and Whitechapel. It’s a short distance, but it will make a big difference to footfall.
