Performance highlights (figures in brackets show movement compared to Q1 2015 unless otherwise stated).
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New life and pensions business (on a PVNBP basis – see editor’s notes for details) of £2,093 million (+52%) (Q1 2015: £1,379m). Main product line performance includes:
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Group Pensions £959m (+86%)
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Individual Pensions £611m (+29%)
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Drawdown £291m (+19%)
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Protection Intermediary £147m (+37%)
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Consumer £67m (+179%)
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Total Group funds under management of £87.9bn at 31 March 2016, up 4% (£84.5bn at 31 December 2015).
Business highlights
In the first quarter to 31 March 2016, there was strong growth in life and pension sales which were up 52% to £2,093m (Q1 2015: £1,379m). Assets under management have grown by 4% in the first quarter of 2016 to £87.9bn (£84.5bn at 31 December 2015) which is a pleasing performance during a period of volatile stock market movements resulting in lack of investor confidence.
By business, the key highlights were:
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Group Pensions increased by 86% on the same quarter of 2015 as advisers continue to recommend Royal London’s award-winning workplace proposition.
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Individual Pensions sales up 29% on prior year as advisers prepare clients to take advantage of pension freedoms in the run up to retirement.
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Income Drawdown new business up 19% on the same period in 2015.
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Protection Intermediary new business sales were up 37% to £147m on the same period last year.
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Consumer new business sales increased by 179% to £67m (Q1 2015: £24m) as sales of simple Term Assurance and Over 50s insurance benefitted from concerted marketing campaigns. Sales from our like-minded corporate partnerships also saw strong growth.
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Royal London Asset Management (RLAM) continued to perform well, attracting new business with gross inflows of £1.1bn (Q1 2015: £0.7bn). This was largely due to a significant increase in Institutional new business with a number of new clients.
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The Ascentric wrap platform saw gross sales of £0.5bn (Q1 2015: £0.6bn). Ascentric continues to maintain market share. Assets under administration increased by 3% to £10.4bn (£10.1bn at 31 December 2015).
Phil Loney, Group Chief Executive of Royal London, said: “The first quarter of 2016 has repeated the record-breaking pattern established throughout 2015. Our strategy of striving to bring the best quality proposition and best customer outcomes to the market is really paying off. While our Pension propositions have been leading the way for some time it is good to see that our Protection proposition in the intermediary market is now finding strong levels of support from advisers.
Our new Consumer division which looks to bring real value to areas of the market where there has been little competition historically is now a significant source of new business in its own right. It focuses on simple products offering better value for money and fairer customer outcomes than our competitors. We continue to concentrate on a non-advised offering to customers who will not or do not utilise regulated financial advisers.
There has been strong growth in new business through our existing corporate partnerships. The partnerships with Co-operative Funeralcare and Ecclesiastical mean that we have the largest share of the pre-paid whole-of-life funeral plan market. We continue to look for more partnership opportunities with corporate partners who share Royal London’s interest in offering customers better value and fairer products.
While new business growth remains robust I anticipate that Group Pensions will see a slowing of momentum in coming quarters. While we continue to bring on board large numbers of schemes, we anticipate that the average premium will be lower as more smaller employers enrol their workforces into a pension.”
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