Royal London sees boost from auto-enrol switching

Loney-Phil-Royal London-2013

Royal London has reported a 39 per cent rise in new life and pensions business to £4.2bn for the first six months of the year, boosted by the growth of a “secondary” automatic enrolment market.

Adviser protection business grew by 24 per cent  to £287m from £231m in the same period last year, while group pensions sales increased by 66 per cent from £1.2bn to £1.9bn.

Advised individual pensions and drawdown sales rose to £1.8bn, which was a 17 per cent increase from £1.5bn at the same time last year.

Group chief executive Phil Loney says the business is seeing a new trend in the auto-enrolment market.

He says: “As the auto-enrolled market matures we are beginning to see a new trend; the growth of a secondary market as advisers recommend schemes move to take advantage of better quality scheme administration or investment options.

“Royal London has benefited from this trend, taking on schemes that have already auto-enrolled with other providers. This ‘flight to quality’ introduces competition to the market and will result in better outcomes for scheme members.”

In the direct-to-consumer division, new life and pensions business rose from £83m in the first half of 2015 to £160m this year, a 93 per cent increase.

Royal London Asset Management saw inflows grow to £2.3bn to 31 June, compared with £1.9bn for the same period last year.

Funds under management rose 11 per cent to £93.8bn compared to £84.5bn at the end of last year.

Loney adds: “Today we are announcing a strong set of results delivered against the uncertain backdrop of the UK referendum on EU membership and continuing low interest rates.

“Despite the reduction in interest rates, profit margins have held up well, allowing continued investment in the business to support the development of our product and servicing capabilities.”