Pension new business volumes and margins rose significantly following the implementation of the pension freedom reforms in April. The Group attributed the increase in margin to 1.6% from 0.9% at 30 June 2014 to a reduction in acquisition and maintenance costs resulting from the increase in volumes of new business.
Sales of Royal London's drawdown product ‘Income Release’ grew 61% in H1 and sales of personal pensions were 56% ahead on the first half of last year. Group pensions new business saw a 9% rise on the same period last year.
Protection Intermediary new business volumes were up 43% (£231m) on the same period last year (£161m) and application levels were 53% above the 2014 levels. Critical Illness Cover was improved to provide practical support to customers from February 2015, when the Helping Hand service was extended to include a second medical opinion.
Consumer new business volumes more than tripled (up 207%) from £27m on 30 June 2014 to £83m on 30 June 2015, reflecting growth in the new range of over 50s life cover, funeral plan and term assurance products.
The Group's Ascentric wrap platform saw gross sales of £1.19bn on 30 June 2015, a 3% improvement on H1 2014. The platform has seen growth in the retirement market since the pension freedoms, enjoying a 115% increase in customers transferring into drawdown.
Phil Loney, Group Chief Executive of Royal London, said:
“We are pleased to be reporting a strong set of new business results and robust operating profits for the first half of 2015. The protection division has made strong improvements, with new business figures up 43% compared to the same period last year. This demonstrates that our strategy of refining the intermediary protection proposition to meet the real needs of customers and investing in technology is beginning to pay off."
