Royal London’s profit before tax tripled to £133mn last year, returning to higher levels after the impacts of Covid-19 was a profit of just £41mn in 2020.
Barry O'Dwyer, the mutual’s chief executive, said in its financial results published today (March 4) the bounce back was down to an increase in sales, which included 30 per cent growth across its workplace pensions arm.
He also mentioned an increase in net flows into its asset management business from £3.87bn to £5.28bn.
With assets under management now sitting at £164bn, up from £148bn the previous year, Royal London paid 1.8mn eligible members £169mn. This equates to an average payment of £93.88 per member.
Protection product sales grew 5 per cent last year, to £1.25bn from £1.19bn. The business paid out a total of £596mn in claims for approximately 80,000 customers.
Royal London’s current individual pensions service, unlike its workplace pensions arm, remained relatively stagnant last year and during 2022 the mutual intends to launch a new personal pensions service.
New business sales in personal pensions grew by 2 per cent, from £4.7bn to £4.8bn, while the workplace arm grew 30 per cent, from £2.46bn to £3.2bn.
Royal London said trading levels remained below pre-pandemic levels across the year, and that growth was curtailed by the slower recovery in the smaller-mid-sized adviser market where it largely operates.
On its new pensions offering, Royal London said: “In 2022, we will be broadening our solutions for customers and providing additional valuable choice and competitive options in the individual pensions market.
“We plan on replicating our successful formula of market leading service, compelling products and very strong broker support, which Royal London is now known for in protection, as we enter a new area of the Irish broker market.”
The mutual said it had built the offering with direct input from advisers and recruited “specialised capabilities”.
The result, it said, was a “holistic and customer centric offering” designed to be transparent, easy to understand and competitively priced.
“Our success in 2021 provides an excellent foundation to launch this new proposition and we are confident of a positive reception and continued growth of our business in Ireland,” the firm said in its results.
Royal London plans to implement a phased delivery to market this year.
The mutual also issued an update on its "legacy simplification" programme, which has been tasked with migrating legacy books of business from older mainframe systems onto a single IT system.
The total number of migrated policies so far has reached 3.2mn. The mutual expects to migrate a further 1mn policies in 2022 and 2023, after migrating just 171,000 policies over two migrations in 2021.
"2021 was a good year for Royal London,” said O'Dwyer. “Sales and profits are both up on last year, [and] we have maintained very strong flows into our asset management business, helping assets to hit record levels.”
