The chief executive of Royal London has vowed to build Britain’s biggest mutually-owned life and pensions provider into “the Waitrose of our sector” after unveiling another set of solid financial results.
Phil Loney, an industry veteran who has headed the firm for almost five years, also said the business was committed to Scotland, where it employs some 1,200 people – or almost a third of its overall workforce – in Edinburgh.
We like being in Scotland and want to be therePhil Loney
Figures for the first half of the year reveal a 39 per cent hike in new life and pensions business, to just over £4.2 billion – a record result for a six-month period.
Operating profit, measured on a industry-standard European embedded value basis, lifted 20 per cent to £138 million, while funds under management were up by 11 per cent to £93.8bn, compared with the end of last year.
Loney said he was “pleased with the breadth of the results” across the group’s three main divisions – pensions, protection and asset management.
“We are trying to build Royal London as the Waitrose of our sector,” he told The Scotsman. “As we are owned by our customers we are always looking to offer them the best service and the best value for money.”
The group, which was founded as a friendly society in a London coffee shop in 1861, said its core pensions business continued to grow on the back of auto-enrolment, “which we expect to continue throughout 2016”.
It expects this pace to ease once smaller schemes have come on board and the initial auto-enrolment staging process comes to an end. However, Loney said that marked “just the end of the start”, stressing that “over time we need to ratchet up the amount employers and employees are saving”.
Commenting on a backdrop of upheaval within the pensions sector, the Royal London boss said: “We really need a period of stability. We need to work together with government and not be constantly hacking away at the pensions system – it creates a really bad karma around pensions in the eye of the public.”
He said the low interest rate environment was placing pressure on industry profitability, but highlighted the group’s “robust” financial standing, including a capital surplus of £2.1bn.
“It’s harder for insurers to make profits but we have enough organic growth going on to help offset that and still produce some good returns with those lower interest rates,” added Loney.
Commenting on the firm’s Scottish operations, he said: “We employ about 1,200 people and see no big changes to those numbers. We like being in Scotland and want to be there.”