Growth in workplace pensions new business contributions and increased expected returns on its assets helped Royal London's operating profit before tax rise 16 per cent to £127m year on year during the first half of 2023.
The mutual reported a drop in life and pensions new business sales of £4,865m, compared to £5,494m during the first half of 2022 as higher interest rates decreased the present value of new business premiums.
Its workplace pensions new business sales grew seven per cent whilst individual pensions sales fell as higher interest rates impacted defined benefit transfer volumes.
Net inflows rose from £2,578m to £3,214m while assets under management increased to £153bn compared to £147bn.
Royal London said its capital position remained robust with the investor view and regulatory view capital cover ratios stable at 212 per cent and 200 per cent. It also issued a £350m restricted tier 1 contingent convertible debt instrument in May, the first of its kind for a UK insurance mutual,
Royal London said it paid 99.1 per cent, of protection claims in the first half of year, paying £343m to over 39,000 customers and their families through life shocks.
Protection pay outs
It also reached an agreement with Aegon UK to acquire its closed individual protection book of over 400,000 policies, increasing the number of protection policies it held to over 1.5 million.
Barry O’Dwyer, group chief executive, said: "This growth, alongside our continued cost discipline, has helped to deliver a 16 per cent increase in operating profit.
“As many of our customers continue to come to terms with the increased cost of living and higher interest rates, our priority has been to help them navigate these challenges, while building their long-term financial resilience.
In April, we shared £155m in profit share with over two million members, and the 120,000 new workplace pensions customers we have welcomed since the start of the year all became members and are eligible for future profitshare allocations.
“Our success in workplace pensions is driven by employers increasingly valuing the benefit as a key way of supporting their employees’ financial wellbeing. As a result, they are choosing to partner with digital first providers with a strong sense of purpose. As more and more employers adopt this view, mutuals, like Royal London, will be a natural choice. Our mutual mindset of continually focusing on delivering positive enduring change for our customers and wider society ensures they, and employers and advisers, continue to place their trust in us.”
