Barry O'Dwyer, Group Chief Executive Officer, commented:
"Royal London is customer-owned and is run for the benefit of customers, not shareholders. We share our profits with eligible customers and our ProfitShare scheme will distribute £181m to 2.3 million customers in April. This was underpinned by the business delivering an 11% increase in operating profit to £277m in 2024.
"Our customer focus means we continually enhance our offerings and digital services to help customers build their financial resilience, often partnering with independent financial advisers. We have recently launched an innovative new online application process for individual pensions business, making it substantially easier for advisers to work with us. Our customer-first approach also appeals to employers wanting to pick the best possible offering and, in 2024, nearly 1,000 employers chose to establish a Royal London Workplace Pension scheme, very often moving from a shareholder-owned competitor.
"2024 also saw Royal London enter the bulk purchase annuity market, giving trustees the option of choosing the only customer-owned provider in this market."
Highlights
- ProfitShare3 of £181m (2023: £163m) to be shared in April 2025 with 2.3 million eligible customers who have pensions and life policies with Royal London.
- The Governed Range, our flagship fund offering, attracted net inflows of £3.2bn (2023: £3.2bn), with assets under management (AUM) reaching £72bn (2023: £61bn).
- Welcomed 966 (2023: 930) new Workplace Pension schemes and 240,000 new scheme members (2023: 240,000). Workplace Pensions new business sales were up by 19%, reflecting the increasing number of medium and large-sized employer scheme wins.
- Introduced a range of digital improvements to support customers to build their financial resilience, including a new contribution guidance tool and further enhancements to our pension consolidation service, helping to deliver a 39% increase in the number of Workplace Pension transfers.
- Continued to enhance our digital offering for financial advisers, launching a new online service that makes it easier for advisers to deal with us, including streamlined and intuitive 'quote and apply' functionality for new business.
- Paid 98.7% (2023: 99.0%) of protection claims, delivering £751m to over 65,000 customers and their families in the UK and Ireland.
- Announced our entry into the bulk purchase annuity market in September 2024 and completed three buy-in transactions with £187m of premiums.
- Made our first natural capital asset purchase, acquiring one of the UK's largest prime farmland assets, while also investing into our UK Living strategy with the purchase of 500 apartments in the Thames Valley.
- Investment performance of actively managed funds remains good, with 60% (2023: 96%) outperforming their three-year benchmark4 on an AUM weighted basis and 81% of funds (2023: 89%) outperforming on an equally weighted basis.
- Our business in Ireland delivered a 29% growth in new business sales of Protection and Pensions products, up to £297m.
- Customer satisfaction, as measured by our Customer Value Statement (CVS5) score, up 3 percentage points over the year, and 11 percentage points since 2020, with an average of 43% of customers rating Royal London 9 or 10 out of 10 across each of seven key measures.
- Contributed £2.8m towards social impact initiatives, including Cancer Research UK, to help tackle cancer inequalities and Turn2us, a national charity working to address financial insecurity across the UK.
Financials
|
Year ended |
Year ended |
||
| UK GAAP |
Operating profit before tax6 | £277m | £249m |
| Transfer to the fund for future appropriations7 | £167m | £382m | |
| ProfitShare3 | £181m | £163m | |
| New business | Life and pensions new business sales8 | £10,804m | £9,253m |
| Inflows/(outflows) | Gross inflows9 | £31,825m | £29,904m |
| Net (outflows)/ inflows9 | £(1,037)m | £4,203m | |
| 31 December 2024 | 31 December 2023 | ||
| Funds | Assets under management10 | £173bn | £162bn |
|
Capital11 |
Regulatory View solvency surplus | £2.7bn | £2.9bn |
| Regulatory View capital cover ratio | 196% | 206% | |
| Investor View solvency surplus | £2.7bn | £2.9bn | |
| Investor View capital cover ratio | 203% | 218% | |
- Operating profit before tax6 increased by 11% to £277m (2023: £249m) supported by increased new business contribution across all our main product lines and a growing book of in-force business.
- Transfer to the fund for future appropriations (FFA)7 of £167m (2023: £382m) includes the impact of positive economic movements and is stated after the allocation of ProfitShare.
- Life and pensions new business sales8 were up 17% to £10,804m (2023: £9,253m) with growth across all products, including a 19% increase in Workplace Pensions due to a rise in both transfer volumes and the number of new schemes won.
- Gross inflows9 rose to £31.8bn (2023: £29.9bn). Net outflows9 of £1.0bn (2023: £4.2bn net inflows) were impacted by £4.3bn of external net outflows from Global Equities strategies following the departure of some members of the Global Equities team.
- Assets under management10 increased to a record £173bn (31 December 2023: £162bn).
- Capital position remains robust as the Investor View and Regulatory View11 ratios reduced to 203% (31 December 2023: 218%) and 196% (31 December 2023: 206%) following changes to the level of equity hedging as we seek to manage the capital position within our capital management framework.
For further information please contact:
Lora Coventry, Senior PR Strategy Manager
- Email: lora.coventry@royallondon.com
- Mob: 07919 170673
Notes to editor
- 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). 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.
- ProfitShare is a discretionary enhancement to eligible RLMIS 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.
- Investment performance has been calculated for funds with a defined external benchmark on an equally weighted basis, by measuring the number of in-scope funds outperforming their three-year benchmark divided by the total number of in-scope funds and, on an AUM weighted basis, by 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.
- The Royal London Customer Value Statement (CVS) model tracks seven key pillars of importance across nearly 3,000 Royal London customers twice a year: Communicate, Membership, Resolution, Be Personal, Pay Out, Investment and Reputation. The results are reported by each factor and through an overarching CVS weighted index that represents the percentage of customers rating the company 9 or 10 out of 10 overall.
- Operating profit before tax is the transfer to the fund for future appropriations before other comprehensive income excluding: short-term investment return variances and economic assumption changes (economic movements); charges/credits 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 before tax represents the result of the Royal London Main Fund (RL Main Fund) and the RLI DAC Open Fund.
- Transfer to the fund for future appropriations represents the statutory UK GAAP measure 'Transfer to the fund for future appropriations' in the technical account within the Consolidated statement of comprehensive income.
- Life and pensions new business sales represent life and pensions business only and exclude Asset Management, other lines of business and bulk purchase annuity buy-ins transacted with the Group's defined benefit pension schemes. 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 the start of the financial period for all new business except annuities where the rate used is the future yield (less an allowance for downgrade and default risk) on assets expected to back these annuitant liabilities over the lifetime of the contracts.
- Gross and net inflows incorporate flows into Royal London Asset Management (RLAM) from external clients (external flows) and those generated from RLMIS (internal flows). External client net flows represent external inflows less external outflows, including cash mandates. Internal net flows 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 actively 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 ‘Investor View’ equals the RL Main Fund capital position (i.e. excluding ring-fenced funds). The ‘Regulatory View’ solvency surplus and capital cover ratio exclude the closed funds’ surplus as a restriction to Own Funds. All capital figures are stated on a Group Partial Internal Model basis and the 2024 figure is estimated and unaudited.
- In November 2024 the Prudential Regulation Authority (PRA) announced the final policy statement to implement reforms to the Solvency II framework previously applicable in the UK. The resultant new prudential regime for UK insurers became effective on 31 December 2024 and will eventually be known as 'Solvency UK'. However, in line with the approach outlined in the policy statement, the UK regime will continue to be referred to as Solvency II until such time as the PRA has changed all references from Solvency II to Solvency UK across all their relevant materials.
- 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 30 mutuals globally*, with assets under management of £173bn, 8.7 million policies in force and over 4,500 employees. Figures quoted are as at 31 December 2024. Learn more at royallondon.com.
*Based on total 2022 premium income. ICMIF Global 500, 2024
