New life and pensions business rose 40% to £1,379 million (£988m in March 2014), supported by a 67% rise in drawdown to £244m and a 68% rise in individual pensions.
Group pension sales continued to gain momentum with a 16% increase on 2014, which was a record year for Royal London sales of workplace pensions.
Intermediary protection increased by 32% to £107 million and consumer protection products rose by 400% to £5 million.
New business volumes for the intermediary protection business rose 32% on Q1 2014. This has been helped by the recent enhancements to Royal London’s critical illness proposition in February, with March sales levels for applications reaching their highest since December 2012, when the introduction of the gender directive led to a significant increase in volumes. The Group will bring together Bright Grey and Scottish Provident as a single Royal London branded protection business by the end of this year.
The company's ascentric wrap platform reached £9.53 billion assets under administration at the end of Q1 2015 (7% increase on Q4 2014), with gross inflows of £555.7m (2014 £530.5m). According to Royal London, the arrival of the pension freedoms on 6 April saw a dramatic rise in SIPP business for Ascentric during Q1, with income drawdown applications increasing by over 80% on Q1 2014. Ascentric’s focus for the rest of 2015 remains the delivery of its new back-office technology giving the business numerous efficiencies and scalability in an increasingly competitive market.
Total Group funds under management were £86.3bn at 31 March 2015, up 5% on 31 December 2014.
Group Chief Executive, Phil Loney commented:
“This is a very strong set of numbers, which comes on top of last year’s record results. In the key areas of pensions and protection we continue to increase market share. The fact that we continue to do so is a result of our investment in the quality of our product and service proposition.
"We have invested considerable time and resource in developing our protection proposition for intermediary distribution, for example by introducing smarter underwriting and giving greater clarity to our critical illness definitions. This effort is beginning to pay off as new business levels are up 32% on the same period last year.
"Our Wealth businesses have continued their growth story during the period by delivering significant inflows to complement rising valuations for existing assets. Ascentric’s assets under administration reached £9.53bn, a 7% increase on Q4 2014. RLAM recorded net new external business inflows of £111m and now manages over £86bn of client assets.
"Individual and group pensions continue to build market share, again on the basis of the quality of these award-winning propositions. We have begun to see the emergence of a “secondary market” in corporate schemes set up to meet the employer duties for auto-enrolment. Employers and their advisers have switched their business to Royal London after dissatisfaction with their first provider’s service. We expect to see more schemes switching as the quality of our servicing wins out in a competitive market. We believe this is an encouraging trend for pension scheme members given that the OFT’s 2013 study of the DC workplace pensions market found such high levels of disengagement amongst employers and low levels of this kind of “shopping around” to secure better value.
"We saw significant inflows (68% up on Q1 2014) of individual pensions business as advisers switched client funds in anticipation of the pension freedoms which came into effect just after the end of this quarter. It is clear that many advisers are recommending our award-winning Income Drawdown proposition for their clients as they approach retirement.”
