Positive first half performance despite continued lockdown

Published  05 August 2021
   5 min read

Interim Results Announcement 


Six months ended

30 June 2021

Six months ended

30 June 2020

UK GAAP Operating profit before tax3 £80m £36m
Profit/(loss) before tax4 £228m £(181)m
New business Life and pensions new business sales5 £4,620m £4,747m
Inflows Gross inflows6 £11,987m £14,419m
Net inflows6 £405m £997m
    30 June 2021 31 December 2020
Funds Assets under management7 £153bn £148bn


(Solvency II)

Regulatory View solvency surplus8 £2.6bn £2.3bn
Regulatory View capital cover ratio8, 11 159% 147%
Investor View solvency surplus8 £2.6bn £2.3bn
Investor View capital cover ratio8, 11 204% 190%


  • Operating profit before tax3 increased to £80m (H1 2020: £36m), with improved contributions from the UK insurance and asset management businesses.
  • Profit before tax4 of £228m (H1 2020: loss of £181m) due to higher returns on UK investments and yield increases during the first half of 2021.
  • Life and pensions new business sales5 were down 3% at £4,620m (H1 2020: £4,747m). Protection products have continued to sell strongly in the UK and Ireland in the first half of the year. Pensions new business sales have recovered from the lower levels in the second half of 2020 but are below pre-pandemic levels.
  • Net inflows6 decreased to £405m (H1 2020: £997m). Demand for our sustainable funds remains strong. Net inflows have been impacted by institutional outflows and a reduced level of internal flow from our individual pension business. 97%10 of actively managed funds outperformed their three-year benchmark (H1 2020: 60%).
  • Assets under management7 increased to a record high of £153bn (31 December 2020: £148bn), due to positive market movements and net inflows.
  • We have committed to reduce the emissions from our investment portfolio by 50% by 2030 as part of the transition to Net Zero by 205012.
  • Our capital position remains robust, with our key capital metrics improving in the first half. Additional equity hedges have increased our solvency surplus and will help to maintain capital stability going forwards.

Barry O’Dwyer, Group Chief Executive, commented:

“During the first half of 2021, we paid claims totalling over £397m to families who faced a life shock, whether that was someone contracting a serious illness or dying. In the same period, we helped our pension customers to invest £4bn in their futures. We welcomed 86,000 new workplace pension customers to Royal London, many of whom are starting their journey in what will hopefully become a lifetime of investing.

Our strong credentials as a sustainable asset manager and an increasing societal focus on responsible investment continues to drive strong flows into our award-winning funds ranges. We believe that our reputation for investing responsibly, combined with our mutual status and the way we share our profits with eligible customers, means we have a uniquely attractive offer, helping Royal London customers to protect their families against life shocks whilst investing in a better future.”

*Royal London will hold an investor conference call to present its 2021 Interim Results on Thursday 5 August 2021 at 09:00. Interested parties can register at: https://cossprereg.btci.com/prereg/key.process?key=PB99HR4YK. A copy of the presentation to investors is available on the Group’s website at https://www.royallondon.com/about-us/corporate-information/corporate-governance/investor-relations/.


To view the full press release click here.


To view the investor presentation click here.


For further information please contact:

Royal London Press Office

Notes to Editors

  1. The information in this announcement relates to The Royal London Mutual Insurance Society Limited (‘RLMIS’ or ‘the Company’), and its subsidiary undertakings, together referred to as ‘Royal London’ or ‘the Group’.
  2. The Group assesses its financial performance based on a number of measures, some of which are not defined or specified in accordance with relevant financial reporting frameworks such as UK GAAP or Solvency II. These measures are known as alternative performance measures (APMs). APMs are disclosed to provide further information on the performance of the Group and should be viewed as complementary to, rather than a substitute for, the measures determined according to UK GAAP and Solvency II requirements. Accordingly, these APMs may not be comparable with similarly titled measures and disclosures by other companies.
  3. Operating profit before tax represents profit (transfer to fund for future appropriations before other comprehensive income) excluding: short-term investment return variances and economic assumption changes; amortisation and impairment of goodwill and other intangibles arising from mergers and acquisitions; ProfitShare; tax; and one-off items of an unusual nature that are not related to the underlying trading of the Group. Profits arising within the closed funds are held within the respective closed fund surplus; therefore UK operating profit represents the result of the RL Main Fund (including transfers to the RL Main Fund from the closed funds).
  4. Profit/(loss) before tax represents the statutory ‘Profit/(loss) before tax and before transfer to/(deduction from) the fund for future appropriations’ in the consolidated statement of comprehensive income.
  5. Life and pensions new business sales represent life and pensions business only and exclude Asset Management and other lines of business. Sales are presented as the Present Value of New Business Premiums (PVNBP), which is the total of new single premium sales received in the period plus the discounted value, at the point of sale, of the regular premiums the Group expects to receive over the term of the new contracts sold in the period. The rate used to discount the cash flows in the reported results has been derived from the 30 June 2021 swap curve provided by the Prudential Regulation Authority (PRA).
  6. Gross and net inflows incorporate flows into Royal London Asset Management Limited (RLAM) from external clients (external flows) and those generated from RLMIS (internal flows). External client net inflows represent external inflows less external outflows, including cash mandates. Internal net inflows from RLMIS represent the combined premiums and deposits received (net of reinsurance) less claims and redemptions paid (net of reinsurance). Given its nature, non-linked Protection business is not included.
  7. Assets under management (AUM) represent the total of assets actively managed by the Group, including funds managed on behalf of third parties.
  8. The ‘Regulatory View’ solvency surplus and capital cover ratio restricts each closed funds’ surplus to the value of the Solvency Capital Requirement (SCR) of that fund. The ‘Investor View’ equals the Royal London Main Fund capital position (excluding ring-fenced funds, which are run on a standalone basis).
  9. All capital figures are stated on a Group Partial Internal Model basis.
  10. Investment performance has been calculated using a weighted average of active assets under management. Benchmarks differ by fund and reflect their mix of assets to ensure direct comparison. Passive funds are excluded from this calculation as, whilst they have a place as part of a balanced portfolio, Royal London believes in the long-term value added by active management.
  11. Figures presented throughout are rounded. The capital cover ratios and new business margins are calculated based on exact figures.
  12. The term Net Zero means achieving a balance between the amount of greenhouse gases emitted into the atmosphere and the amount removed from it. The commitment is based on the expectation that governments and policy makers will deliver on the commitments to achieve the 1.5oC temperature goal of the Paris Agreement, and this action does not contravene Royal London's fiduciary duty to external investors. The commitment is based on our emissions profile of 2020. It includes assets that are controlled by RLMIS

About Royal London

Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £153 billion, 8.8 million policies in force and 4,075 employees. Figures quoted are as at 30 June 2021.