Interim Management Statement and New Business Results for 9 months ending 30 September 2009
30 October 2009
Royal London, the UK's largest mutual life and pensions company, has published its Interim Management Statement and new business results for the nine months ending 30 September 2009.
Total new life and pensions business (on a PVNBP* basis) £1,847 million (£1,710m in the equivalent period in 2008), an increase of 8%, including the effect of businesses acquired in 2008
- Bright Grey new business up 10% to £140m (£127m in 2008)
- Scottish Provident new business £170m (see note 1 below)
- Royal London (retail) new business £79m (see note 2 below)
-
Scottish Life new business down 5% to £1,107m (£1,169m in 2008)
-- continued growth in Individual pensions, up 6% to £710m
-- Group pensions down 24% at £244m - Royal London 360° new business £188m (see note 3 below)
- RLAS new business down 3% at £163m (£168m in 2008)
- RLAM (excl cash mandates) gross new business down 13% to £1,167m (£1,349m in 2008)
- Ascentric new assets under administration up 61% at £233m (£145m in 2008)
Notes
1. The Scottish Provident protection business was acquired on 29 December 2008.
2. Royal London (retail) is the renamed Phoenix Life Assurance business (previously known as Abbey National Life) which was acquired on 1 August 2008.
3. Royal London 360° is the international business formed in January 2009 by combining Scottish Life International and Scottish Provident International (the latter having been acquired on 3 June 2008). As a result of the formation of Royal London 360°, it is not possible to provide an overall prior year comparison for the Group on a 'like-with-like' basis.
* See Editor's note for explanation of the PVNBP basis.
Commenting on the new business announcement, Mike Yardley, Group Chief Executive at Royal London, said:
"The Group has continued to achieve good overall results, increasing the total amount of profitable new business despite the uncertain economic backdrop.
"Our protection businesses have again performed well, with steadily increasing market share. Despite a very difficult market for pensions, Scottish Life performed well in the third quarter and new business figures are now close to last year's record level. Ascentric had an excellent third quarter performance, reflecting the hard work that has been undertaken over the two years since acquisition to establish a very powerful proposition in the Wrap market.
"Although economic conditions will remain difficult, I am confident that we will continue to attract good levels of new business during the rest of the year and into 2010."
Business unit review
Our protection businesses, Bright Grey and Scottish Provident, continue to perform well, steadily increasing their share of the market. Bright Grey has focussed on helping IFAs protect and grow their business through difficult trading conditions and this is proving very successful. Scottish Provident's award-winning critical illness offering continues to be very popular, while research has confirmed that they have one of the highest percentages of claims paid in the industry.
Business through the Royal London (retail) arm, which produces products for Abbey, has held up well in the current market. Following a successful tender, our contract has been extended to cover Santander's enlarged UK business. This includes the Alliance and Leicester network (from mid-November) and the Bradford and Bingley network (from December) which are soon to be rebranded, along with the Abbey network, to Santander.
The economic environment continues to have a significant impact on the pensions market and providers generally are struggling to match last year's new business results. Scottish Life delivered good performance in the three months to end September, with new business 6% up compared to the same period last year. In the individual market, Income Release (part of the Pension Portfolio product) continues to be very popular with IFAs, with quality of service a key differentiator. The latest available market share figures show that, when figures for internal transfers are excluded, Scottish Life has over 37% of IFA sales in this sector of the market.
Royal London 360° continues to promote its brand, products and services with positive results. Although investment bond sales have been weak across the entire offshore sector, reflecting uncertain market conditions, the flow of new regular premium business has been healthier. The launch of the new LifePlan product has been well received in the international protection market, a sector which has seen recent strong growth.
Asset management continues to be directly affected by the economic conditions and volatile investment markets. Despite this, RLAM continues to enjoy strong levels of support from institutional and wholesale investors, attracted by our experienced team and track record.
Ascentric has had a very good third quarter, not only in relation to new assets under administration, but also with the strong volume of registrations experienced over the period. There are a number of white label deals that are expected to come on line in the fourth quarter which sets the company up well for the future.
Corporate Update
There have been no significant developments since Royal London announced its interim financial results for the 6 months to 30 June on 30 September 2009.
For further information please contact:
Royal London
Alasdair Buchanan, Group Head of Communications
Tel: 0131 456 7133
Mobile: 07919 170 413
Polhill Communications
John Coles
Mobile: 07836 273 660
Editor's Notes:
1. Royal London Group is a specialist financial service provider. Its businesses focus on those sectors of the market which value quality propositions, operating through a number of brands:
- Scottish Life – UK pensions market
- Bright Grey – UK protection market
- Scottish Provident – UK protection market
- Royal London 360° – offshore investment markets
- RLAM – fund management
- RLAS – life and pensions administration
- Fundsdirect / Ascentric – funds supermarket; Wrap platform
Royal London also distributes life and pensions products through Santander's UK branch networks.
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £35.5 billion. Group businesses serve around 3.6 million customers and employ 2,800 people. Figures quoted are as at 30 September 2009.