New business results and interim management statement
Date: 14 May 2013 Royal London Group posts strong first quarter results
New Business Results and Interim Management Statement for 3 months ending 31 March 2013 Royal London, the UK’s largest mutual life and pensions company, today announces its new business results for the 3 months ending 31 March 2013. Total new life and pensions business (on a PVNBP(note 3) basis) increased by 22% to £929 million (2012 £761 million).
Scottish Life new business up 29% to £698m (2012 £542m) Bright Grey / Scottish Provident new business up 12% to £121m (2012 £107m) Caledonian Life new business up 30% at £10m (2012 £8m) Royal London 360° new business unchanged at £90m (2012 £90m) RLAM (excl cash mandates) net new business inflow £224m (2012 outflow £495m) Funds under management up 5% to £50bn (end 2012 £47.6bn) Ascentric net inflow of new assets under administration up 34% to £392m (2012 £293m) Assets under administration up 16% to £5.9bn (end 2012 £5.1bn)
Commenting on the results, Phil Loney, Group Chief Executive at Royal London, said: “The positive momentum in our business performance from the second half of last year has continued in the first quarter of 2013. “Our pensions business has experienced significant growth. We expect further growth in group pensions as our high quality offerings and service continue to prove extremely popular with advisers in the post RDR market. “RLAM has experienced good net inflows after some large cyclical outflows in the same period in 2012. The levels are almost double the amount which we received in the equivalent period in 2011 which further highlights the strong position and excellent reputation the business has in its markets.
“Our protection businesses in the UK and Ireland have again delivered good growth and work closely with advisers to encourage more consumers to understand the key importance of protection cover throughout their lives. “Ascentric had its best ever quarter with its highest ever inflow of new assets, new adviser firms increasing three-fold and total assets under administration already nudging £6 billion having just broken the £5 billion mark late last year. The business is profitable, very popular with advisers and, following further significant investment in its service capability, is well placed for growth throughout 2013. “In the immediate future we look forward to our EGM on Tuesday 4 June 2013 which gives our members the opportunity to approve our acquisition of the life insurance and asset management businesses from the Co-operative Banking Group. The strong capital position that we have built up over recent years has enabled us to make this acquisition for the benefit of our members. Full details of our proposals were recently issued to our members. This acquisition will add significant value to their membership and, in increasing our customer base by 2 million people and our assets by £20 billion, is a truly exciting opportunity for the Royal London business and one which I wholly commend to them”. -- ENDS – For further information please contact: Royal London Scott White, Interim Head of PR Redleaf Polhill John Coles
0131 456 7095 07919 170 713 07836 273 660
Editor’s Notes: 1. Royal London Group is a specialist financial service provider. Its businesses focus on those sectors of the market which value quality propositions, operating through a number of brands: Scottish Life – UK pensions market Bright Grey – UK protection market Scottish Provident – UK protection market Caledonian Life – ROI protection market Royal London 360° – offshore investment markets RLAM – fund management Royal London Plus – life and pensions administration Ascentric/IFDL – Wrap platform MoneyVista – online financial planning service for consumers Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £52.2 billion. Group businesses serve around 4 million customers and employ 3,040 people. Figures quoted are as at 31 March 2013.
2. New life and pensions business for 3 months to 31 March 2013 Equivalent figures for 2012 in brackets. All figures are in £ million. (a) Present Value of New Business Premiums (PVNBP)
Scottish Life Bright Grey / Scottish Provident Caledonian Life Royal London 360° Royal London Plus
£ million 697.6 (542.2) 120.7 (107.3) 10.4 (8.0) 90.0 (90.3) 10.4 (12.9)
Change 29% 12% 30% -19%
Group total
929.1 (760.7)
22%
(b) Annual Premium Equivalent (APE) £ million 88.1 (70.5) 16.7 (16.2) 1.5 (1.3) 11.6 (10.6) 1.1 (1.7)
Change 25% 3% 15% 9% -35%
119.0 (100.3)
19%
Scottish Life Bright Grey / Scottish Provident Caledonian Life Royal London 360° Royal London Plus Group total
3. Present Value of New Business Premiums PVNBP figures are the present value of new business premiums. The PVNBP figures are calculated as new single premiums plus the expected present value of new regular premiums. Annual Premium Equivalent APE figures were the previous industry standard measure, calculated as new regular premiums plus one tenth of new single premiums. 4. Asset Management / Administration Net new business for 3 months to 31 March 2013. Equivalent figures for the same period in 2012 are in brackets. All figures are in £ million. £ million
Change
RLAM* 224.0 (-495.4) * Net new business, excluding external cash mandates.
-
£ million 392.0 (293.0)
Change 34%
Ascentric** ** Net new assets under administration
5. Corporate announcements and activities On 19 March Royal London announced it has signed the Sale and Purchase Agreement to acquire the life insurance and asset management businesses from The Co-operative Banking Group. On 28 March, Royal London announced its financial results for 2012, with EEV profit before tax and mutual dividend up 45% on 2011 at £336m and Insurance Group Directive (IGD) capital surplus up 25% compared with 2011.
6. Royal London Plus The new business shown above for Royal London Plus, consists primarily of DWP rebates. These relate to policies sold by Royal London’s direct-to-customer sales force (which was closed in 2004) and to policies transferred to Royal London following the acquisition of the United Assurance Group (Refuge Assurance and United Friendly) in 2001. Royal London continues to offer a range of products, including several from selected third parties, direct to customers through its contact centre in Wilmslow. 7. Financial Calendar 4 June 2013 Extraordinary General Meeting and Annual General Meeting 20 August 2013 Interim financial results 5 November 2013 Interim management statement and third quarter new business figures
8. Forward-looking statements This document may contain forward-looking statements with respect to certain of Royal London’s plans, its current goals and expectations relating to its future financial position. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Royal London’s control. These include, among others, UK economic and business conditions, market-related risks such as fluctuations in interest rates, the policies and actions of governmental and regulatory authorities, the impact of competition, the timing, impact and other uncertainties of future mergers or combinations within relevant industries. As a result, Royal London’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Royal London’s forwardlooking statements. Royal London undertakes no obligation to update the forward-looking statements.
Appendix: Analysis of New Business Results – Life and Pensions (a) PVNBP figures 2013 PVNBP (£m)
2012 PVNBP (£m)
% change
Regular Prems
Single Prems
Total PVNBP
Regular Prems
Single Prems
Total PVNBP
Regular Prems
Single Prems
Total PVNBP
63.7
328.1
391.8
69.1
274.6
343.7
-8%
19%
14%
171.3
96.9
268.2
106.0
59.2
165.2
62%
64%
62%
DWP rebates
-
0.2
0.2
-
0.2
0.2
-
0%
0%
Annuities
-
37.4
37.4
-
32.7
32.7
-
14%
14%
Miscellaneous
-
-
-
0.2
0.2
0.4
-100%
-100%
-100%
Scottish Life subtotal
235.0
462.6
697.6
175.3
366.9
542.2
34%
26%
29%
Bright Grey/Scottish Provident
120.7
-
120.7
107.3
-
107.3
12%
-
12%
Caledonian Life
10.4
-
10.4
8.0
-
8.0
30%
-
30%
Royal London 360°
34.7
55.3
90.0
21.3
69.0
90.3
63%
-20%
-
-
0.9
0.9
-
0.8
0.8
-
13%
13%
Other
0.3
9.2
9.5
1.9
10.2
12.1
-84%
-10%
-21%
Royal London Plus sub-total
0.3
10.1
10.4
1.9
11.0
12.9
-84%
-8%
-19%
401.1
528.0
929.1
313.8
446.9
760.7
28%
18%
22%
Scottish Life: Individual pensions Group pensions
Royal London Plus: DWP rebates
Group total
New business relating to DWP rebates has ceased, as a result of legislative changes.
(b) APE Figures
2013 APE (£m)
2012 APE (£m)
% change
Individual pensions
44.2
40.1
10%
Group pensions
40.2
27.1
48%
3.7
3.3
12%
Scottish Life sub-total
88.1
70.5
25%
Bright Grey / Scottish Provident
16.7
16.2
3%
1.5
1.3
15%
11.6
10.6
9%
DWP rebates
0.1
0.1
0%
Other
1.0
1.6
-38%
Royal London Plus sub-total
1.1
1.7
-35%
119.0
100.3
19%
Scottish Life:
Annuities
Caledonian Royal London 360° Royal London Plus:
Group Total
New business relating to DWP rebates has ceased, as a result of legislative changes.
New Business Results and Interim Management Statement for 3 months ending 31 March 2013 Royal London, the UK’s largest mutual life and pensions company, today announces its new business results for the 3 months ending 31 March 2013. Total new life and pensions business (on a PVNBP(note 3) basis) increased by 22% to £929 million (2012 £761 million).
Scottish Life new business up 29% to £698m (2012 £542m) Bright Grey / Scottish Provident new business up 12% to £121m (2012 £107m) Caledonian Life new business up 30% at £10m (2012 £8m) Royal London 360° new business unchanged at £90m (2012 £90m) RLAM (excl cash mandates) net new business inflow £224m (2012 outflow £495m) Funds under management up 5% to £50bn (end 2012 £47.6bn) Ascentric net inflow of new assets under administration up 34% to £392m (2012 £293m) Assets under administration up 16% to £5.9bn (end 2012 £5.1bn)
Commenting on the results, Phil Loney, Group Chief Executive at Royal London, said: “The positive momentum in our business performance from the second half of last year has continued in the first quarter of 2013. “Our pensions business has experienced significant growth. We expect further growth in group pensions as our high quality offerings and service continue to prove extremely popular with advisers in the post RDR market. “RLAM has experienced good net inflows after some large cyclical outflows in the same period in 2012. The levels are almost double the amount which we received in the equivalent period in 2011 which further highlights the strong position and excellent reputation the business has in its markets.
“Our protection businesses in the UK and Ireland have again delivered good growth and work closely with advisers to encourage more consumers to understand the key importance of protection cover throughout their lives. “Ascentric had its best ever quarter with its highest ever inflow of new assets, new adviser firms increasing three-fold and total assets under administration already nudging £6 billion having just broken the £5 billion mark late last year. The business is profitable, very popular with advisers and, following further significant investment in its service capability, is well placed for growth throughout 2013. “In the immediate future we look forward to our EGM on Tuesday 4 June 2013 which gives our members the opportunity to approve our acquisition of the life insurance and asset management businesses from the Co-operative Banking Group. The strong capital position that we have built up over recent years has enabled us to make this acquisition for the benefit of our members. Full details of our proposals were recently issued to our members. This acquisition will add significant value to their membership and, in increasing our customer base by 2 million people and our assets by £20 billion, is a truly exciting opportunity for the Royal London business and one which I wholly commend to them”. -- ENDS – For further information please contact: Royal London Scott White, Interim Head of PR Redleaf Polhill John Coles
0131 456 7095 07919 170 713 07836 273 660
Editor’s Notes: 1. Royal London Group is a specialist financial service provider. Its businesses focus on those sectors of the market which value quality propositions, operating through a number of brands: Scottish Life – UK pensions market Bright Grey – UK protection market Scottish Provident – UK protection market Caledonian Life – ROI protection market Royal London 360° – offshore investment markets RLAM – fund management Royal London Plus – life and pensions administration Ascentric/IFDL – Wrap platform MoneyVista – online financial planning service for consumers Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £52.2 billion. Group businesses serve around 4 million customers and employ 3,040 people. Figures quoted are as at 31 March 2013.
2. New life and pensions business for 3 months to 31 March 2013 Equivalent figures for 2012 in brackets. All figures are in £ million. (a) Present Value of New Business Premiums (PVNBP)
Scottish Life Bright Grey / Scottish Provident Caledonian Life Royal London 360° Royal London Plus
£ million 697.6 (542.2) 120.7 (107.3) 10.4 (8.0) 90.0 (90.3) 10.4 (12.9)
Change 29% 12% 30% -19%
Group total
929.1 (760.7)
22%
(b) Annual Premium Equivalent (APE) £ million 88.1 (70.5) 16.7 (16.2) 1.5 (1.3) 11.6 (10.6) 1.1 (1.7)
Change 25% 3% 15% 9% -35%
119.0 (100.3)
19%
Scottish Life Bright Grey / Scottish Provident Caledonian Life Royal London 360° Royal London Plus Group total
3. Present Value of New Business Premiums PVNBP figures are the present value of new business premiums. The PVNBP figures are calculated as new single premiums plus the expected present value of new regular premiums. Annual Premium Equivalent APE figures were the previous industry standard measure, calculated as new regular premiums plus one tenth of new single premiums. 4. Asset Management / Administration Net new business for 3 months to 31 March 2013. Equivalent figures for the same period in 2012 are in brackets. All figures are in £ million. £ million
Change
RLAM* 224.0 (-495.4) * Net new business, excluding external cash mandates.
-
£ million 392.0 (293.0)
Change 34%
Ascentric** ** Net new assets under administration
5. Corporate announcements and activities On 19 March Royal London announced it has signed the Sale and Purchase Agreement to acquire the life insurance and asset management businesses from The Co-operative Banking Group. On 28 March, Royal London announced its financial results for 2012, with EEV profit before tax and mutual dividend up 45% on 2011 at £336m and Insurance Group Directive (IGD) capital surplus up 25% compared with 2011.
6. Royal London Plus The new business shown above for Royal London Plus, consists primarily of DWP rebates. These relate to policies sold by Royal London’s direct-to-customer sales force (which was closed in 2004) and to policies transferred to Royal London following the acquisition of the United Assurance Group (Refuge Assurance and United Friendly) in 2001. Royal London continues to offer a range of products, including several from selected third parties, direct to customers through its contact centre in Wilmslow. 7. Financial Calendar 4 June 2013 Extraordinary General Meeting and Annual General Meeting 20 August 2013 Interim financial results 5 November 2013 Interim management statement and third quarter new business figures
8. Forward-looking statements This document may contain forward-looking statements with respect to certain of Royal London’s plans, its current goals and expectations relating to its future financial position. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Royal London’s control. These include, among others, UK economic and business conditions, market-related risks such as fluctuations in interest rates, the policies and actions of governmental and regulatory authorities, the impact of competition, the timing, impact and other uncertainties of future mergers or combinations within relevant industries. As a result, Royal London’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Royal London’s forwardlooking statements. Royal London undertakes no obligation to update the forward-looking statements.
Appendix: Analysis of New Business Results – Life and Pensions (a) PVNBP figures 2013 PVNBP (£m)
2012 PVNBP (£m)
% change
Regular Prems
Single Prems
Total PVNBP
Regular Prems
Single Prems
Total PVNBP
Regular Prems
Single Prems
Total PVNBP
63.7
328.1
391.8
69.1
274.6
343.7
-8%
19%
14%
171.3
96.9
268.2
106.0
59.2
165.2
62%
64%
62%
DWP rebates
-
0.2
0.2
-
0.2
0.2
-
0%
0%
Annuities
-
37.4
37.4
-
32.7
32.7
-
14%
14%
Miscellaneous
-
-
-
0.2
0.2
0.4
-100%
-100%
-100%
Scottish Life subtotal
235.0
462.6
697.6
175.3
366.9
542.2
34%
26%
29%
Bright Grey/Scottish Provident
120.7
-
120.7
107.3
-
107.3
12%
-
12%
Caledonian Life
10.4
-
10.4
8.0
-
8.0
30%
-
30%
Royal London 360°
34.7
55.3
90.0
21.3
69.0
90.3
63%
-20%
-
-
0.9
0.9
-
0.8
0.8
-
13%
13%
Other
0.3
9.2
9.5
1.9
10.2
12.1
-84%
-10%
-21%
Royal London Plus sub-total
0.3
10.1
10.4
1.9
11.0
12.9
-84%
-8%
-19%
401.1
528.0
929.1
313.8
446.9
760.7
28%
18%
22%
Scottish Life: Individual pensions Group pensions
Royal London Plus: DWP rebates
Group total
New business relating to DWP rebates has ceased, as a result of legislative changes.
(b) APE Figures
2013 APE (£m)
2012 APE (£m)
% change
Individual pensions
44.2
40.1
10%
Group pensions
40.2
27.1
48%
3.7
3.3
12%
Scottish Life sub-total
88.1
70.5
25%
Bright Grey / Scottish Provident
16.7
16.2
3%
1.5
1.3
15%
11.6
10.6
9%
DWP rebates
0.1
0.1
0%
Other
1.0
1.6
-38%
Royal London Plus sub-total
1.1
1.7
-35%
119.0
100.3
19%
Scottish Life:
Annuities
Caledonian Royal London 360° Royal London Plus:
Group Total
New business relating to DWP rebates has ceased, as a result of legislative changes.
