An industry-wide reduction in defined benefit pension transfers has affected Royal London, resulting in a reduction in its individual pension business.

Publishing its half-year results, today, 12 August, it said that life and pension sales decreased 4 per cent in H1 2019 to £5,824m (H1 2018: £6,077m) primarily due to a reduced level of defined benefit transfers, partially offset by higher workplace pension sales from new entrants to existing schemes and new scheme wins.

However, Royal London reported that new business contribution increased 6 per cent to £127m (H1 2018: £120m) as revenue margins improved due to reduced acquisition expenses.

Workplace pension new business sales increased by 6 per cent to £1,930m (H1 2018: £1,821m), due to new entrants into existing schemes and new scheme wins, while individual pensions new business sales decreased by 10 per cent to £3,232m (H1 2018: £3,577m), which it put down to a reduction in DB transfer activity.

“We continue to grow the individual pensions business as customers reach retirement and seek greater flexibility in the provision of pension benefits,” it stated.

Commenting, Royal London chairman, Kevin Parry, said: "First half trading was robust. RLAM won new mandates on the back of strong investment performance across asset classes. New business in pensions was marginally lower reflecting the industry-wide reduction in defined benefit transfers, offset by higher workplace sales. Consumer and protection traded in line with expectations, making excellent progress in the Irish market.

"Royal London is well prepared for Brexit and will continue to monitor carefully any developments that might affect our business and customers. We will keep customers informed of significant developments relevant to their policies. We continue to maintain a robust capital foundation to allow us to invest in our future core products and propositions whilst also innovating to deliver better outcomes for customers in underserved markets.

"The board looks forward to welcoming Barry O'Dwyer as group chief executive on 23 September 2019."

Overall, net inflows were 31 per cent higher at £5.5bn, compared to H1 2018m, when net inflows reached £4.2bn. Gross inflows increased to £12.6bn (H1 2018: £9.6bn) driven by external institutional business wins and strong flows into Royal London Asset Management's (RLAM) wholesale range of credit and sustainable funds.

Royal London has assets under management of £130bn, up from £114bn at 31 December 2018, due to market growth of £10.5bn and net inflows of £5.5bn.

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