Strong figures from insurer
Pension reforms lift Royal London to record year
Over-55s have invested in new products after gaining greater access to their pension pots.
Sales of group pensions and income drawdown products have been strong as the fourth quarter saw pension sales reach new highs.
The company, which includes the former Scottish Life and Scottish Provident businesses, said sales of protection products through intermediaries are now surging ahead.
Direct-to-consumer division is making “significant headway” with a strong growth in revenues allowing a substantial increase in investment in the business at the same time as growing profits.
The main Royal London With-Profits fund again benefited from a positive investment return in 2015 and is ahead of its benchmark over one, three and five years.
The total bonuses paid to policyholders have increased by 144% from those in 2014. In addition, the asset shares of qualifying With-Profits policyholders benefit from a ProfitShare; the asset shares have been uplifted by 1.4% (up from 1.15% in 2014) this year. Over the last decade our profit sharing approach has boosted the value of policies held by qualifying customers to the tune of £536m.
Phil Loney, chief executive, said: “Our strategy continues to produce pleasing results and over the last four years Royal London has doubled its life and pension sales and has nearly doubled assets under management.”
· Improved overall margin of 2% (+43%) on new life and pensions business has been achieved as operating efficiency initiatives are embedded across the business.
· EEV Operating profit before tax and exceptional items £244m (+11%).
This increase is driven by the success of pension and insurance businesses and the record new business figures. New business profits rose to £137m (2014: £85m).
· Embedded value has exceeded the £3bn mark for the first time – £3.2bn (+6%) following good total profit performance.
· IFRS transfer to unallocated divisible surplus £218m (+63%)
IFRS results also benefit from Royal London’s strong trading performance and improved margins.
· Group funds under management £84.5bn (+3%).
Increase due to net inflows and good underlying investment performance in difficult markets.
· Surplus regulatory (Insurance Groups Directive) capital £3,535m (+4%).
Stronger capital position is a consequence of improved new business results and the £350m raised by a subordinated debt issue in November 2015.
· ProfitShare £70m (+17%)
ProfitShare paid to eligible Policyholders increased by 17% in 2015 as a result of the improved new business results and strong capital position. This brings the cumulative ProfitShare paid to members to £536m since 2007.