Brexit, what Brexit? That seemed to be the message from mutual insurer Royal London as it published its earnings report today – and managed to hit record levels.
Its new life and pension business shot up by 39% to reach £4,201 million for the first six months of the year – that’s a leap from £3,032 million for the same period one year earlier and a new record for the insurer. Its funds under management also grew by 11% to reach £93.8 billion while operating profits climbed from £115 million to £138 million.
Meanwhile, the company’s solvency ratio – that’s the proportion of capital set aside for investment, underwriting and operational risks – was 166%, a slight fall from 169% at the end of December.
Pensions were the driving force for the insurer, which, as a mutual, is not listed on the stock market. It managed to increase the value of new business by more than £1 billion to stand at £3.7 billion and the contribution from new business reached £67 million – up from £24 million one year earlier.
Speaking about the results, Phil Loney, the group’s chief executive, pointed to the company’s strategy as the reason for its success.
“Our strategy of differentiating Royal London from the competition by concentrating on quality, value for money products and the delivery of service excellence is driving the success of our business,” he said. “Today we are announcing a strong set of results delivered against the uncertain backdrop of the UK referendum on EU membership and continuing low interest rates. Despite the reduction in interest rates, profit margins have held up well, allowing continued investment in the business to support the development of our product and servicing capabilities.
“For example, we have made a substantial investment in our protection proposition for customers introduced by intermediaries, making improvements to the customer journey with enhancements to the online application and underwriting processes and keener pricing. These improvements have resulted in wider adviser and customer engagement and an improvement in first half new business.”
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