Growth in new business continues at Royal London
31 July 2007
Royal London, UK mutual life and pensions company, has announced continued growth in profitable new business for the half year to end June 2007.
Total new life and pensions business (on a PVNBP basis) for the Group increased by 6% to £1006 million (£949m in the equivalent period in 2006)
Scottish Life new business up 7% to £747 million (£695m in 2006)
Bright Grey new business up 14% to £91 million (£79m in 2006)
Scottish Life International (SLI) new business down 25% to £76 million (£101m in 2006)
Royal London-branded new business up 25% to £93 million (£74m in 2006)
Royal London Asset Management (RLAM) gross new business up 233% to £1,515million (excludes external cash mandates)
Commenting on the new business announcement, Mike Yardley, Group Chief Executive at Royal London, said: “After a relatively slow start to the year, new business has increased steadily during the 6 months.
“All our specialist businesses are now performing well and have strong positions in their markets, though for SLI the figures reflect the exceptionally strong sales performance in the first half of 2006. We continue to operate successfully in what is a highly competitive environment and we will be looking to carry this positive momentum into the second half of 2007.”
The strongest area of growth for Scottish Life was Individual Pensions, up 23% compared with the first half of 2006, following the launch of Pension Portfolio, a new individual pension plan which incorporates SIPP self-investment options.
The Group Pensions market remains difficult although sales of defined contribution business have been improving during the second quarter. Sales of Retirement Solutions, our flagship group DC plan, were 26% down on the comparable period in 2006 at the end of the first quarter. By the end of the second quarter the gap had narrowed to 3%. This is a very creditable performance given that Scottish Life has chosen not to participate in the continuing merry-go-round of high initial commissions that characterise much of this sector, leading to reported -- but in reality largely non-existent -- market growth.
Bright Grey has continued its record of growth in a very competitive market. It has had considerable success in increasing its presence on adviser panels where its added value proposition is proving very attractive. A campaign targeting mortgage brokers achieved good results and there are several campaigns planned for the second half of the year.
One of the main factors behind Bright Grey’s success has been the ability to differentiate its proposition to customers. For example, as well as competitive premium rates, Bright Grey offers the “Helping Hand” service at no extra cost. This complements the financial benefits of insurance by providing the policyholder and their family with extra support at times when money alone may not be enough.
Scottish Life International (SLI) had a slower first half compared to the exceptional performance in 2006, when sales in Germany were particularly strong. SLI launched a new product into the German market in May and it is already proving popular.
RLAM has had an outstanding first half-year attracting over £1.5 billion of new external funds (excluding external cash mandates). £1.39 billion of this total came from institutional investors, of which £1.24 billion was from nineteen new mandates and the balance from existing clients. This is testament to RLAM’s excellent fixed income track record and also reflects increased investment flows into the specialist equity funds. The launch of the Ethical Bond Trust in January, which attracted £60 million, contributed to this new business result.
