Royal London Scots staff benefit from results

ROYAL London, the UK’s largest mutual life and pensions group, hailed a “wonderful” result for the firm’s Scottish staff as it unveiled a £88 million pay-out to with-profits policyholders.

The group said the dividend would be allocated to around 250,000 policyholders depending on their asset share, an average of £352 each.

It reported a 45 per cent rise in full-year pre-tax profits to £336m, thanks in part to new assets gathered by its fund management arm in 2012. Inflows at Royal London Asset Management (Rlam) grew 66 per cent to £47.6 billion in assets it manages on behalf of pension funds, savers and wealthy individuals.

Phil Loney, who presented his first set of full-year result since taking over as chief executive in October 2011, said the company was able to maintain the same dividend in 2012 despite the previous year’s figures being boosted by its acquisition of the Royal Liver business.

He said: “We haven’t got a one-off like Royal Liver in our results this year. The good news is the underlying results are strong enough to maintain that level of payment. That money goes straight into the policies of our relevant with-profits members, which boosts their investment returns.”

Earlier this month Royal London acquired the life insurance and asset management arm of the Co-operative group for £219m. The deal will boost the group’s assets under management to £70bn, which Rlam chief executive Andy Carter said would make the business “a substantial asset management firm in our own right”.

Loney added that the acquisition would “support our ability to go on paying things like our mutual dividend in future”.

The company grew its business at its Edinburgh-based operations, including its Scottish Life division which was up 8 per cent to £2.4bn. This came in the run up to new rules under the retail distribution review (RDR) affecting how intermediaries such as independent financial advisers (IFAs) sold products. Protection sales, through its Bright Grey and Scottish Provident brands grew 23 per cent to £482m.

Loney said: “New business areas of Royal Life, particularly Scottish Life, Bright Grey and Scottish Provident, they have all done really well. Sales are up particularly in the protection market place and in the run up to RDR.

“It is a wonderful set of results for over 1,200 people we employ in Scotland. They have been working very hard in constantly improving our service and our propositions, making sure we are price competitive. That is paying off, we are gaining market share in the pensions market and performing strongly in the protection market.

“In the run up to RDR, the benefit of that customer focus - which stems from our mutuality - is paying off.”