Strong flows into sustainable funds drives growth in assets under management

Published  05 March 2021
   8 min read

Financial Highlights


Year ended

31 December 2020

Year ended 

31 December 2019

UK GAAP Operating profit before tax1 £41m £165m
Profit before tax2 £131m £414m
ProfitShare3 £146m £140m
New business Life and pensions new business sales4 £8,544m £10,699m
Inflows Gross inflows5 £26,407m £25,131m
Net inflows5 £3,870m £9,892m
    31 December 2020 31 December 2019
Funds Assets under management6 £148bn £139bn


(Solvency II)

Regulatory View solvency surplus7 £2.3bn £2.6bn
Regulatory View capital cover ratio7 147% 159%
Investor View solvency surplus8 £2.3bn £2.6bn
Investor View capital cover ratio8 190% 219%
  • Operating profit before tax1 decreased to £41m (2019: £165m), reflecting reduced new business sales and continued investment to enhance customer service and generate long-term growth.
  • Profit before tax2 of £131m (2019: £414m), reflecting reduced operating profit as well as lower relative returns on UK investments in 2020 and further reductions in yields to historic lows.
  • ProfitShare3 allocation rates to eligible customers maintained, with total ProfitShare increasing to £146m (2019: £140m) in line with the growth in the aggregate value of eligible policies.
  • Life and pensions new business sales4 20% lower impacted by the national lockdowns.
  • Net inflows5 were £3,870m in 2020 (2019: £9,892m) as strong growth in demand for sustainable funds was offset by external institutional outflows. 95%9 of actively managed funds outperformed their three-year benchmark (2019: 98%).
  • Assets under management6 increased to £148bn (31 December 2019: £139bn).
  • Our capital position remains robust. This has allowed us to continue strategic investment in our pensions business and enhancements to our legacy systems, as well as maintaining ProfitShare allocations.


Barry O’Dwyer, Group Chief Executive, commented:

“Our asset management business successfully navigated volatile financial markets in 2020. Assets under management increased to £148bn and we saw strong inflows into our sustainable funds. Pensions new business sales reduced, primarily due to individuals delaying the decision to consolidate their investments and fewer people moving employer during these uncertain times.

Intermediated Protection performed strongly as a result of enhancements to our product proposition and maintaining excellent customer service. We have paid £13.1m in Protection claims to families of more than 2,100 customers who sadly died from Covid-19.

As a mutual we are able to take a long-term approach despite short-term uncertainties. Our robust capital position has allowed us to continue our investment in systems and service to benefit our customers. Eligible customers will also benefit from a ProfitShare of £146m, a unique feature of mutuality which enhances the value of their savings.”


Kevin Parry OBE, Chairman, commented:

“The dedication shown by colleagues across the business as they support our customers has been exemplary and a testament to our values as a mutual organisation. Our mutual status allows us to put the needs of our customers above all else, focusing on the long-term to ensure we are best placed to help customers through the economic and societal challenges ahead.

In 2020 we demonstrated the wider role that we play in society by working with people who we all depend on and people who need our support. Our merger with Police Mutual allowed us to insure over 250,000 Police officers, members of the armed forces, staff and their families. We contributed over £1 million to charities that relieve poverty and counteract the impact of Covid-19.

In common with society as a whole, we look forward to a brighter and healthier future as the vaccinations programme progresses.”


Read the full press release here.

Read the investor presentation here.


For further information please contact:

Royal London Press Office

Editor's notes

  1. Operating profit before tax is represented as 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 & 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 RL Main Fund from the closed funds).
  2. Profit before tax represents the statutory ‘Profit before tax and before transfer to the fund for future appropriations’ in the statement of comprehensive income.
  3. ProfitShare is a discretionary enhancement to eligible customers with unit-linked or with-profits policies. The allocation is considered annually and depends on a number of factors including financial performance, capital position, the risks and volatility of financial markets and the Group’s outlook.
  4. Life and pensions new 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 year 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 year. The rate used to discount the cash flows in the reported results has been derived from the 31 December 2020 swap curve provided by the Prudential Regulation Authority (PRA).
  5. Gross and net inflows incorporate flows into 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 (net of reinsurance). Given its nature, non-linked Protection business is not included.
  6. Assets under management represent the total of assets actively managed by the Group, including funds managed on behalf of third parties. Figures are stated as at 31 December.
  7. The ‘Regulatory View’ capital cover ratio restricts each closed fund’s surplus to the value of the Solvency Capital Requirement (SCR) of that fund. 2020 capital figures are estimated.
  8. The Group has changed the ‘Investor View’ capital cover ratio metric in 2020 to equal the Royal London Main Fund (RL Main Fund) capital position (excluding ring-fenced funds). The definition is considered to be more appropriate given the RL Main Fund is the primary source of capital for the group, and that the closed funds are ring-fenced and run on a standalone basis. The 31 December 2019 Group Investor View comparatives have been restated, and exclude the capital surpluses of the closed funds of £3.2bn reported in 2019. The 31 December 2019 Group Investor view comparatives have been restated from £5,810m solvency surplus to £2,632m and the capital cover ratio from 231% to 219%. All Group capital figures are stated on a Partial Internal Model basis. 2020 capital figures are estimated.
  9. 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.
  10. Figures presented throughout are rounded. The capital cover ratios and new business margins are calculated based on exact figures.

About Royal London

Royal London is the largest mutual life, pensions and investment company in the UK, with assets under management of £147 billion, 8.7 million policies in force and 4,232 employees. Figures quoted are as at 31 December 2022. 

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