Royal London saw its life and pensions business reach a record high in the first six months of the year, helped by advisers recommending its auto-enrolment service.
The company’s life and pensions arm has maintained its upward trajectory in terms of new business, which bounced up 39 per cent to £4.2bn, from the £3bn reported at the end of June 2015.
Fresh business for its group pensions division was up 66 per cent to £1.9bn, from the £1.2bn reported at the same time last year.
Phil Loney, group chief executive of Royal London, said he is seeing a new trend now the auto-enrolled market is beginning to mature, pointing to the growth of a secondary market as advisers move employers to schemes to take advantage of “better quality” administration or investment options.
“Royal London has benefited from this trend, taking on schemes that have already auto-enrolled with other providers.
“This ‘flight to quality’ introduces competition to the market and will result in better outcomes for scheme members.
While he expects the pensions business to continue to grow throughout the rest of this year because of auto-enrolment, he anticipated the rate of growth will slow down once smaller schemes have enrolled and the initial AE staging process comes to an end.
In May, Royal London revealed its life and pensions business had exceeded £2bn in the first three months of the year.
According to the results released today (18 August), the intermediary protection business was up by nearly a quarter, hitting £287m, against the £231m figure reported at the same time last year.
Debbie Kennedy, head of protection at Royal London Intermediary, said the growth in sales showed work to review and improve the business when the Bright Grey and Scottish Provident brands were brought together under one brand, is working for advisers and customers.
“We have improved our market presence to an 11 per cent market share and positioned ourselves as a credible protection provider. We plan to build on this solid foundation and it’s a great response from the adviser market to the rebrand.”
The asset management arm also saw a jump, with funds under management increasing 11 per cent over the six months of the year to stand at nearly £94bn.
Mr Loney said profit margins have “held up well”, despite the reduction in interest rates and the uncertain backdrop following the UK’s vote to leave the European Union.
This, he said, has meant the business can continue to invest in the development of its products and servicing , such as improving the online application, underwriting processes, and offering “keener pricing” for its protection proposition.
“These improvements have resulted in wider adviser and customer engagement and an improvement in first half new business.”
Royal London’s efforts to enter the direct-to-consumer market have also made significant strides, with its life and pensions business jumping by 93 per cent in the space of a year, reaching £160m, from the £83m reported on 30 June 2015.
katherine.denham@ft.com
