Royal London profits surge double digits as pensions grow
Royal London’s operating profit before tax increased by 13 per cent for H1 2024, as the insurer credits its focus on a long-term strategy to have increased its profits.
Its operating profit before tax was £144m, up from £127m in H1 2023, which the group said was supported by a growing book of in-force business and higher Workplace Pensions new business contribution.
On new business, life and pensions business sales were up 4 per cent to £5bn (H1 2023: £4.9bn), while across the UK, overall pensions new business sales were up 3 per cent at £4.4bn (H1 2023: £4.3bn).
Workplace Pensions new business sales grew by 11 per cent, as the insurer welcomed 510 (H1 2023: 479) new workplace pension scheme employers and over 113,000 (H1 2023: 120,000) new members into new and existing schemes.
Its assets under management increased to £169bn (31 December 2023: £162bn). While gross inflows rose to £16.3bn (H1 2023: £15.0bn). Net inflows were impacted by £1.7bn of external net outflows fell to £0.1bn (H1 2023: £3.2bn). This was due to its global equity strategies following the departure of a number of members of the global equities team.
Its protection new business sales increased 8 per cent to £399m (H1 2023: £368m) following an increased focus on high-net-worth customers as it builds capability and credibility in this part of the market.
Back in April 2023, Royal London snapped up Aegon UK’s protection business, adding 400,000 new customers and their financial advisers to its books.
As a result of the Consumer Duty, the insurer said it continues to see increasing interest from advisers who traditionally have not focused on protection, with many now seeking to write business themselves or refer to a protection specialist.
Royal London has continued to develop its digital functionality leading the insurer to have over 320,000 UK customers registered on the My Royal London portal, up by nearly 200,000 in 12 months.
While in Ireland, Royal London had a strong performance into 2024, with new business sales across the company increasing by 17 per cent to £129m (H1 2023: £110m) reflecting the growth in its pensions offering.
Royal London’s strategy is to be an insight-led, modern mutual growing sustainable firm by deepening customer relationships.
Commenting on the results, group CEO Barry O’Dwyer noted that “the strength of our relationships with financial advisers and businesses offering workplace pension schemes has underpinned a 13 per cent increase in group operating profit for the first half of 2024.”
“When we perform well our customers benefit and, in April, we shared over £163m with over two million eligible customers through our ProfitShare scheme,” he stated.
O’Dwyer added that “with an estimated £3tn invested in UK pensions, it is understandable pensions are viewed as being able to play a powerful role in supporting UK economic growth.”
Despite that, he did state that “it is important to remember the primary role of pensions is to fund customers’ retirement”.
“The new [UK] government has an opportunity to build on the success of automatic enrolment by creating a long-term plan that would have a positive impact on retirement outcomes while also generating investment to help finance growth,” he added