After a couple of turbulent years, we at Standard Life are determined to make 2005 a landmark year for our company. By putting in the hard graft in the coming months, we expect to enter 2006 stronger and fitter and this will help pave the way to our planned demutualisation.I recognise that this is a contentious topic but it is my conviction that only demutualisation will allow Standard Life to grow and prosper. I believe only demutualisation will allow us to maintain our position as one of the dominant forces in our industry and only demutualisation will give our 2.6 million members the full benefit of their association with Standard Life. Our goal this year is, therefore, to lay the foundations for this future success. Maximising our potential this year is particularly important as Standard Life, like many in the industry, has come through some difficult years. We have contributed to our own difficulties but, having recognised this, we are setting our own house in order. An important issue that Standard Life will be addressing this year is the quality of the business we write. During 2001 and 2002, Standard Life increased the amount of new business we did in the UK to reduce the cost of writing each policy. This strategy was not effective and so, like any good business, we have re-evaluated and changed direction. This led to a fall in UK life and pension new business last year but we are comfortable with that. We believe it is better to switch focus from unprofitable and marginal products to products that should produce a good return. We have already identified a number of areas for growth in the investment and protection markets. For example, early sales and quotations for our new Sipp products are significantly higher than anticipated. Standard Life has also decided to change its commission and charging structures on products we believe have become too expensive to write. It should come as no surprise that our product terms cannot stay the same if there are huge chan-ges in the rules which govern them. The commission chan-ges we have introduced may represent a serious challenge for some IFAs and their business models. However, having spoken to many IFAs on this issue, I believe there is a general understanding about why such changes were necessary. We are already seeing a number of other providers adopting a similar stance but there are those who may continue to offer uneconomic commission and I can only assume that they are merely delaying the inevitable. By being more selective in the business we write and by cutting our operating costs and commission, we are improving our profitability. We remain committed to del-ivering a quality service to our customers through our traditional and more direct distribution channels. IFAs will remain our core distribution channel but we cannot ignore the changes that are brought about by depolarisation. We will seek to secure our access to the market and ensure that our UK life and pension business will come out of 2005 fighting fit for the benefit both of policyholders and their advisers. Standard Life’s policyholders and IFAs will benefit from financial security and solid, consistent and sustainable long-term growth. At this time, we are operating in an extremely capital-intensive market. Access to additional capital to grow and develop our business will be critical. If we achieve all we want this year, then next year, Standard Life will reach the moment of decision. Voting members will have to decide if they want their company to demutualise or take an alternative path. It is my belief that demutualisation is our only credible future path. I say this with sadness as I have been a supporter of mutuality for many years. But Standard Life has reached the point where it cannot deliver the benefits of being in a mutual to its policyholders, who nevertheless retain the risks associated with being providers of capital to the business. Becoming a publicly listed company would give us access to additional external capital, enable us to grow and return value built up in the company to our eligible members. I bel-ieve the logic for demutualisation is compelling and I believe that the vast majority of members will agree when we set out the logic for them in the months ahead. Two words ring constantly in our ears – maximise and crystallise. We want to maximise the value of Standard Life for the benefit of all of our stakeholders. Demutualisation will crystallise the value at a point in time and deliver that value to members. In the meantime, I am encouraging all those who express an active interest in the company to do so in a manner which enhances its prospects rather than subtracts from its value. The next few years will be pivotal in the long history of Standard Life. We plan to lay the foundations for our future success this year and then we aim to demutualise. If our proposals are supported, I believe this change will benefit our emp-loyees, policyholders and those advisers who have put their faith in us so consistently over the years.