Major Edinburgh employer Royal London financially strong despite big losses

Royal London, the life and pensions mutual that employs hundreds of staff in Scotland, has highlighted its financial strength after the coronavirus crisis sent it tumbling to a £181 million loss in the first half.

Royal London group chief executive Barry O’Dwyer, a well-known Standard Life veteran who took on the top job last September.

The group, which has seen 98 per cent of its staff switch to working from home during lockdown, said life and pensions sales had fallen by almost a fifth as companies deferred decisions to move pension scheme providers and individuals delayed investment decisions.

It posted a pre-tax loss of £181m for the six months to the end of June, compared with a profit of £397m a year earlier, following falls in real asset values and a reduction in bond yields.

Despite the turmoil, assets under management at the group, which employs some 1,500 staff across its Edinburgh and Glasgow ­offices, held stable at £139 billion.

The latest results also showed that net inflows amounted to £997m during the first half, against just under £5.5bn in the same period last year.

Group chief executive Barry O’Dwyer, a well-known Standard Life veteran who took on the top job last September, said: “Our focus has been on supporting customers and advisers through the challenges associated with Covid-19. In particular, we have supported policyholders who have difficulty paying premiums due to their personal circumstances by encouraging them to contact us to arrange a practical way forward to maintain cover.

“Despite market volatility and economic uncertainty assets under management were stable at £139bn. Our capital position remains strong.

“New business sales for protection products grew by 15 per cent, which was partly as a result of the pandemic reminding customers of the importance of life insurance, critical illness and income protection. Pension sales were lower as a consequence of the disruption to advisers’ ability to do business during lockdown.”

He added: “Covid-19 will inevitably continue to have an impact on new business prospects. Looking further ahead, our strong capital position and unrivalled reputation with advisers and customers will stand us in good stead as we continue to help customers meet their protection, investment and long-term savings needs.”

Chairman Kevin Parry said the group had paid out claims to the families of more than 1,200 customers as a result of deaths attributable to Covid-19, adding: “Our thoughts are with all our customers and their families at this time.”

He said: “Royal London has successfully transitioned to 98 per cent of our people working from home, enabling us to continue to provide our normal high level of service to customers. We remained open for business without needing to ask customers to delay interaction with us and we did this without taking any government support.”

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