(1)   Premiums and deposits include premiums on risk-based insurance and annuity products, and deposits on individual and group segregated fund deposits, consistent with insurance industry practices.

We provide Canadians with improved access to INSURANCE choices through a wide range of insurance solutions including life, health, travel, home, auto, and creditor insurance services to individual and business clients. These products are distributed through third-party channels including independent life insurance advisors and travel agents as well as through our growing proprietary channels such as retail insurance branches, bank branches, call centres, online, and our career sales force. In the U.S., we offer life insurance, annuity products and travel insurance. Outside North America, we operate a specialty reinsurance business.

 
  2008 Key performance highlights
•  Net income was down 12%, or $53 million, over last year, mainly due to $110 million ($80 million after taxes) of investment losses on disposals and impairments, as well as impacts from equity market movements. This was partially offset by favourable actuarial adjustments and solid growth in our reinsurance and Canadian businesses. Our prior year included a $40 million (before- and after-tax) gain related to the reallocation of certain foreign investment capital which had supported our property catastrophe reinsurance business, exited in 2007. This decline was partially offset by higher net actuarial adjustments reflecting management actions and assumption changes and solid growth in our reinsurance and Canadian businesses.
•  Revenue decreased 18%, or $582 million, over last year mainly due to the change in fair value of investments backing our life and health policyholder liabilities, largely offset in policyholder benefits, claims and acquisition expense. The decrease, which also reflects lower U.S. annuity sales as well as investment losses on disposals and impairments, as well as impacts from equity market movements was partially offset by growth in our reinsurance and Canadian businesses.
•  Premiums and deposits grew $401 million, or 12%, from a year ago, largely reflecting new sales growth, a U.K. annuity reinsurance arrangement and continued strong client retention.
   
  Business achievements in 2008
•  We expanded our retail insurance network in Canada to 35 branches in 2008, from 21 branches in 2007, giving our clients more convenient access to insurance services and advice. Advisor’s Edge, a trade publication, recognized the impact of our retail insurance presence, naming the development of our insurance branch network as one of the most significant events in financial services over the last 10 years.
•  We expanded our insurance offering in a number of ways to support large and small Canadian businesses, including reaching an agreement with Aon Reed Stenhouse Inc. (Aon) to provide commercial property and casualty and trade credit insurance solutions to business owners. This agreement with Aon, combined with our existing products and services, will enable us to provide large and small Canadian businesses with innovative advice and effective solutions tailored to meet their insurance needs.
•  We continued to make it easier for Canadian clients to do business with us by offering a simplified life insurance product for the mass market and improving our online travel insurance offerings.
•  RBC was recognized for our Wireless Road Advisor project at the 21st annual CIO 100 Awards program as an innovative organization that uses IT to create business value. This system enables mobile claims adjusters to use their laptops to access claims information over a wireless network to help clients with the claims process.
• We were the first Canadian-owned travel insurance provider to sign on with InRoomMD, a healthcare concierge program providing in-room hotel visits 24 hours a day, seven days a week, whenever possible, saving travellers the inconvenience of having to search for medical assistance while visiting the U.S.
• Through our Canadian Banking operations, we also became the first major Canadian bank to launch a disability insurance option under our Business Loan Insurance Plan which assists business owners by covering insured business loan and mortgage payments.
   
  2009 and beyond
•  We will focus on providing superior insurance solutions for our clients through new and existing distribution channels.
•  We will enhance the client experience by providing customers with a comprehensive suite of RBC products and services based on their needs.
•  The Lean Six Sigma methodology will be applied to process reviews of various groups – including health claims management, new product development, and new application processing – with a focus on immediate enhancements but also effecting a cycle of continuous improvement.
• We will focus on growing internationally through our reinsurance operations by executing on transactions that fit within RBC’s overall risk framework.
• We will work to leverage our expanded retail banking presence in the U.S. and Caribbean to grow non-Canadian insurance revenue, providing clients with an integrated experience and RBC product suite to serve their business needs.