Royal London recorded a 16 per cent increase in operating profit to £282m for 2016 as new life and pensions business grew by 28 per cent.
However, the results statement shows how wrap platform Ascentric’s replatforming project has impacted Royal London’s balance sheet.
The statement says Royal London took a £44m hit on “uncovered business” on its platform due to “significant” costs relating to the development of Ascentric’s new back office software.
The statement says: “We have recognised an impairment of £44m in the year.”
Ascentric recorded a 22 per cent increase in assets under administration to £12.3bn but gross sales dropped from £2.5bn in 2015 to £2.3bn last year.
Overall, new life and pensions business at the mutual in 2016 came in at £8.68bn, up from £6.77bn in 2015.
New business in the intermediary protection arm increased 29 per cent from £502m in 2015 to £647m in 2016. The company attributed this to a programme last year that brought all protection business under the Royal London brand and the introduction of online underwriting.
Group pensions rose by 38 per cent to £3.8bn and individual pensions and drawdown increased 17 per cent to £3.7bn
Royal London Asset Management gross inflows more than doubled from £3.1bn in 2015 to £6.7bn in 2016. Funds under management rose 18 per cent from £85bn in 2015 to £100bn last year, which Royal London says is a record for the group.
Royal London group chief executive Phil Loney says the business is becoming a “much bigger and more established” presence in the markets it operates in.
He says: “These results reflect the continued excellent progress of Royal London in 2016, performing well despite the backdrop of a turbulent year in politics and markets.”
Loney says: “It is clear from the sustained track record of growth that our strategy is working: we are delivering high-quality products and service; we are investing in our capabilities, making it easier for advisers to do business with us; and we are entering new consumer markets to offer better value where we see that the market is delivering a poor deal for consumers. As a result, our customers and financial advisers are increasingly recommending us to others.”