19% increase in new business sales driven by the strength of investment offering
Barry O’Dwyer, Group Chief Executive, commented:
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Notes to Editors
- 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’.
- 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) and include Operating profit before tax. 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.
- Investment performance has been calculated using a weighted average of active assets under management for funds with a defined external benchmark. Benchmarks differ by fund and reflect their mix of assets to ensure direct comparison. Passive funds are excluded from this calculation as, while they have a place as part of a balanced portfolio, Royal London believes in the long-term value added by active management.
- Operating profit before tax represents (loss)/profit (transfer (from)/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/losses arising within the closed funds are held within the respective closed fund surplus; therefore operating profit represents the result of the Royal London Main Fund (RL Main Fund).
- (Loss)/profit before tax represents the statutory ‘(Loss)/profit before tax and before transfer (from)/to the fund for future appropriations’ in the consolidated statement of comprehensive income.
- Life and pensions new business sales represent life and pensions business only and excludes 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 swap curve at 31 December 2021 for all new business except annuities, where instead the swap rate at the end of each prior month is used to discount the next month’s new business cashflows.
- 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 paid (net of reinsurance). Given its nature, non-linked Protection business is not included.
- Assets under management (AUM) represent the total of assets managed by the Group, including funds managed on behalf of third parties.
- The capital cover ratio is calculated as the Group’s Own Funds, being the regulatory capital under Solvency II, divided by the Solvency Capital Requirement (SCR). The ‘Regulatory View’ solvency surplus and capital cover ratio restricts each closed funds’ surplus to the value of the SCR of that fund. The ‘Investor View’ equals the RL Main Fund capital position (excluding ring-fenced funds, which are run on a standalone basis). All capital figures are stated on a Group Partial Internal Model basis.
- 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.
Learn more at royallondon.com