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Royal London profits rise 45% after pension and protection growth

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Royal London’s EEV pre-tax profits are up 45 per cent to £336m in 2012 after strong performance from its pensions and protection brands.

The life and pension company’s annual results, published today, show pension provider Scottish Life’s new business grew 8 per cent from £2.2bn in 2011 to £2.4bn last year as protection brands Bright Grey and Scottish Provident combined saw new business leap 23 per cent from £393m to £482m.

The firm’s total life and pensions business grew 7 per cent to £3.5bn as it returned the same mutual dividend of £88m for last year as in 2011.

On its Ascentric wrap platform, new assets fell 8 per cent to £1.2bn as total assets grew 41 per cent to £5.1bn.

Royal London Asset Management saw 24 per cent net outflows over the year.

The Royal London Open Fund out-performed 2011 with 8.6 per cent growth compared to 6 per cent the year before and bonuses on with-profits policies jumped to £282m from £231m.

The provider’s regulatory capital surplus grew by 25 per cent to £2.4bn for the year.

Royal London chief executive Phil Loney said: “These results represent my first full year as CEO of the Royal London Group. They are indicative of the strengths that we have in the market, our commitment to our members and policyholders and our core focus in delivering a strong and meaningful mutual alternative in the UK life and pensions and asset management markets.

“We returned good value to our with-profits policyholders in 2012, through investment returns that were 0.8 per cent ahead of the relevant benchmark, and bonuses which continue to represent a good return compared to our key competitors.”

Loney says the firm’s decision to buy the Co-operative Bank’s insurance and asset business last week will bring in 2 million more customers and boost its assets under management by £20bn.

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