Royal London posts rising profit and strong flows
Royal London, the UK’s largest mutual life, pensions and investment company, said profit before tax increased to £192m (2020: £131m) for the year ended 31 December. Operating profit before tax was £133m (2020: £41m).
Trading in some areas of the group has been affected by the ongoing impact of Covid-19, but there were also positive indicators of economic recovery. RLAM saw assets under management increase to £164bn (2020: £148bn), passing the £150bn milestone for the first time.
Pension new business sales were £7.96 billion (2020: £7.190bn). Individual Pension volumes were below pre-pandemic levels, but recovering.
“We have seen a steady improvement in Workplace Pensions sales, as employers stepped up their recruitment and were more willing to consider switching their workplace pension provider.”
New business sales of protection business have performed strongly in the UK and Ireland, increasing by 5% to £1.25bn (2020: £1.19bn) in the UK and by 35% to £185m (2020: £137m) in Ireland.
Barry O’Dwyer, chief executive, said: “2021 was a good year for Royal London. Sales and profits are both up on last year. We have maintained very strong flows into our asset management business, helping assets to hit record levels.”
Kevin Parry, chairman, commented: “We are committed to our mutual status and are strong advocates of the role mutuals play in financial services.
“This year we will share £169m with 1.8 million eligible customers. Since we introduced ProfitShare in 2007, Royal London has returned more than £1.2bn, which is only possible because we are a mutual.”
- Operating profit before tax of £133m returned to higher levels following the impacts of Covid-19 in 2020 (2020: £41m) and reflects increased contributions from all of businesses. Profit before tax increased to £192m (2020: £131m).
- Life and pensions new business sales8 were up 12% at £9,588m (2020: £8,544m), due to continued strong adviser support for our Protection range in the UK and Ireland and growth in demand for UK Pensions, particularly in Workplace Pensions.
- Net inflows9 increased to £5,287m (2020: £3,870m) driven by ongoing demand for our sustainable fund range and Institutional net new business.
- Assets under management10 increased to a record high of £164bn (31 December 2020: £148bn), due to positive market movements and increased net flows.
- Capital position remains robust with key capital metrics improving and the Investor View capital cover ratio increasing to 216% (2020: 190%) following the recovery in economic conditions and management actions taken including additional equity hedging.