Royal London plots bulk annuities push as profits rise
Life insurer Royal London said it was looking to push further into the booming bulk purchase annuities market today as it posted a 19 per cent rise in profit for the year.
In its full-year results this morning, the customer-owned insurance group said it had notched a pre-tax profit of £249m, up from £210m, the previous year on the back of growth in new business and “the positive impact of higher risk-free rates.”
The firm’s flagship governed range attracted net inflows of £3bn, which helped to push up assets under management (AUM) to £60bn, up from £53bn the previous year.
Chair Kevin Parry said the firm had delivered a boot despite “another year of significant uncertainty.”
“Our mutuality enables us to continue to focus on the long term and to put our members and customers firmly at the heart of our decision-making,” he added.
“We have again shared our success with eligible customers through Profitshare. I am delighted that our ongoing performance and continued strength has enabled us to share £163m with over two million eligible customers.”
Bosses said they were now looking to push further into the buoyant bulk purchase annuities market after striking a number of deals over the past year, including the Royal Liver UK pension schemes.
“Through these transactions we have extended our annuity capabilities in advance of an intended participation in the bulk purchase annuities market, focussed on providing a competitive solution to the trustees of defined benefit pension schemes,” the firm said.
The market for these buyouts has boomed over the past year as rising interest rates have boosted the funding position of corporate pension schemes, allowing them to be offloaded onto life insurers.
Royal London was also among firms reportedly weighing a bid for the £6bn bulk annuities portfolio being sold by Lloyds Banking Group in January.