We will continue to shift our business mix to more fee and spread-oriented products and away from products that contain higher-than-desired equity and interest rate risk. We plan to shift capital to higher return applications. We also
intend to continue to hedge or reinsure exposures to further reduce capital and earnings at risk. We intend to improve return on equity to 13 per cent by
2015.2 While we would like to achieve this sooner, we have capital invested in businesses that are not performing as well as we wish. We have made important changes to our capital allocation and have, for some time, been pricing all products and strategic investments with a target in excess of 14 per
cent.
In many cases, we price far in excess of that target. The steady growth of new business priced for higher returns will be reflected in growth of return on equity over time. We will continue to offer a quality value proposition to
clients. Providing products and services to ensure a high level of client satisfaction is a core mandate for our Company. Our success in doing so is crucial to our overall success. In this case, that means delivering solutions that address our clients’most significant financial decisions.
As we plan our growth, we remain alert for opportunities for acquisitions in addition to our plans to grow our existing businesses.
当社の成長計画の一環とて、既存ビジネスの拡大計画と共に買収の機会にも注目していきたいと思っております。
We will also continue to monitor regulatory changes stemming from global initiatives including Basel III, Solvency II and International Financial Reporting Standards (IFRS).
At this time, it is too early to know the full impact or outcome of the International Accounting Standards Board (IASB) recent Exposure Draft. We are committed, with our insurance colleagues in Canada and around the world, to continuing to work with the IASB with the goal of arriving at standards that will improve and strengthen our system and avoid unintended consequences.
