Royal London, the UK's largest mutual life insurance and pensions company, has reported a 16% increase in operating profit to £127 million for the first half of 2023, driven mainly by growth in Workplace Pensions.
The company's net inflows in this area increased by 25% to over £3.2 billion.
"Our success in Workplace Pensions is driven by employers increasingly valuing the benefit as a key way of supporting their employees’ financial well-being," said chief executive Barry O'Dwyer.
"As a result, they are choosing to partner with digital-first providers with a strong sense of purpose. As more and more employers adopt this view, mutuals, like Royal London, will be a natural choice."
Royal London recorded a reduction in life and pensions new business sales to £4.9 billion, down from £5.5 billion in the same period last year
Assets under management went the other way - increasing to £153 billion, up from £147 billion at the end of 2022. This growth was partly driven by higher external net flows into Royal London's Global Equity strategies.
The company's capital position remains robust, with both the Investor View and Regulatory View capital cover ratios stable at 212% and 200%, respectively. This stability comes even after taking into account the impact of acquiring Aegon UK's protection book, a move that strengthens Royal London's position in the UK protection market.
Additionally, Royal London successfully issued a £350 million Restricted Tier 1 contingent convertible debt instrument in May, a first for a UK insurance mutual. This issuance diversifies the company's overall subordinated debt profile and increases its financial flexibility.