Royal London results: Mutual boosts policy values for eligible customers

Published  08 March 2023
   5 min read

Barry O’Dwyer, Group Chief Executive, commented:

"In 2022 we concluded our programme to simplify our business. As a direct result, Royal London has been able to increase the value of our long-standing customers’ policies by £675m in total through the consolidation of closed with-profits funds.  We have also successfully modernised many elements of our business, introducing more efficient digital services for over four million customers whose policies have been moved onto enhanced systems.

"During the year we have continued to see good growth, delivering a 12% increase in new business sales in 2022. Supported by our focus on cost efficiency as we have streamlined our operations, this has driven a 58% increase in operating profit."

Kevin Parry OBE, Chairman, commented:

"Our ability to share our success with customers is only possible because we are a mutual. Our aim is to invest continually in our business while awarding discretionary ProfitShare every year. We have again maintained our allocation rates awarding £155m to eligible customers. Our continued strength means they are receiving ProfitShare for the seventh year in a row, demonstrating Royal London’s consistent approach.

"We also believe our role and responsibilities extend to supporting wider-society and in 2022, charitable and social impact initiatives benefited from over £2m in donations and support, the equivalent of 1% of our operating profit. This included support for our flagship national charity partner Turn2us, who provide guidance and financial relief to families in crisis. In addition, we also broadened our charitable giving to organisations who are focused on preventing and limiting the impact of serious illnesses, including Cancer Research UK, and we will be looking at additional opportunities to build on this over the coming year."


  • ProfitShare allocation rates maintained, with total ProfitShare of £155m (2021: £169m), with the reduction attributable to market movements in eligible policies.
  • We have added a total of £675m over the last two years to our long-standing customers’ policy values as a result of our closed with-profits fund consolidation programme, which is now complete.
  • Our flagship Governed Range attracted net inflows of £3.4bn, with AUM reaching a record high of £53bn.
  • Investment performance of actively managed funds over three years remains strong in difficult market conditions, with 80% of funds outperforming their three-year benchmark (2021: 99%)4
  • Launched a free online service for Workplace Pension members to assess their financial wellbeing and build awareness of financial resilience for them and their families.
  • Enhanced support for Protection advisers through a new online dashboard providing proactive case management, while also improving Protection customers’ experience with the new MyRoyalLondon portal. 
  • Completed the three-year migration of 4.3 million long-standing policies onto new technology, enhancing the quality of customers’ servicing experience. 
  • Royal London Asset Management (RLAM) launched two new sustainable fund offerings, the Sustainable Growth Fund, and the Sustainable Short Duration Corporate Bond fund, to capitalise on investment opportunities that can have a positive influence on society and the environment. 
  • Entered the individual pension market in Ireland, offering customers access to our investment range and services to build their financial resilience, while capitalising on our strong brand and reputation with brokers. 



Year ended
31 December 2022

Year ended
31 December 2021

UK GAAP Operating profit before tax5 £210m £133m
Transfer (from)/to the fund for future appropriations6 £(162)m £79m
ProfitShare3 £155m £169m
New business Life and pensions new business sales7 £10,776m £9,588m
Inflows Gross inflows8 £26,647m £26,432m
Net inflows8 £3,718m £5,287m
  31 December 2022 31 December 2021
Funds Assets under management9 £147bn £164bn

(Solvency II)

Regulatory View solvency surplus10 £2.5bn £2.8bn
Regulatory View capital cover ratio10 206% 173%
Investor View solvency surplus10 £2.5bn £2.8bn
Investor View capital cover ratio10 213% 216%
  • Operating profit before tax5 increased by 58% to £210m as the adverse market impacts on asset management revenues were more than offset by the benefits from a continuing focus on cost control, growing the annuity portfolio, and consolidating and simplifying closed funds.
  • Transfer from the fund for future appropriations (FFA)6 was £162m (2021: transfer to FFA £79m), reflecting adverse market movements, in particular the fall in equity and bond markets, outweighing benefits from increased yields.  
  • Life and pensions new business sales7 up 12% at £10,776m (2021: £9,588m), reflecting the post-pandemic increase in both Individual and Workplace pension flows, a strong UK employment market, and the relative performance of our Governed Range.
  • Net inflows8 remained positive at £3,718m (2021: £5,287m) supported by our strong performance track record across our range of asset classes and despite cash outflows from some institutional clients with leveraged LDI portfolios managed by other institutions. 
  • Assets under management9 decreased to £147bn (2021: £164bn) despite the net inflows, as falls in equity and bond markets impacted underlying asset values.
  • Capital position remains robust with the Investor View capital cover stable at 213% (2021: 216%) and the Regulatory View capital cover ratio10 increasing to 206% (2021: 173%) following the significant increases in yields which have reduced the closed fund capital requirements.

A copy of the full release can be found here.

A copy of the investor presentation can be found here.

For further information please contact:

Steve Hartley, Head of External Communications

Notes to editor

  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. 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. 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, whilst they have a place as part of a balanced portfolio, Royal London believes in the long-term value added by active management.
  5. Operating profit before tax represents profit/(loss) before transfer to/(from) the fund for future appropriations excluding: short-term investment return variances and economic assumption changes; amortisation of goodwill and other intangibles arising from mergers and acquisitions; ProfitShare; ValueShare; tax; and one-off items of an unusual nature that are not related to the underlying trading of the Group. Profits or 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).
  6. Transfer (from)/to the fund for future appropriations represents the statutory UK GAAP measure ‘(Deduction from)/transfer to the fund for future appropriations’ in the technical account within the consolidated statement of comprehensive income. 
  7. Life and pensions new business sales represent life and pensions business only and excludes Asset Management and other lines of business. 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 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 opening 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.
  8. 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
  9. Assets under management (AUM) represent the total of assets actively managed by the Group, including funds managed on behalf of third parties. 
  10. 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 fund’s 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 and the 2022 figure is estimated.
  11. 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, and in the top 25 mutuals globally, with assets under management of £153 billion, 8.6 million policies in force and over 4,100 employees. Figures quoted are as at 30 June 2023. Learn more at