Royal London new business up 11% but protection sales fall

Royal London group received a boost from Scottish Life and 360° during the first half of 2011 but its protection arm suffered a 17% sales slump.

Stronger sales helped turn last year's H1 loss of £2m into a pre-tax profit of £138m (IFRS basis) for the first six months of 2011.

Total new business (PVNBP) for the group rose 11% to £1,788m over the period compared to £1,615m during H1, 2010.

Pensions arm Scottish Life's new business increased 10% to £1,243m while international arm Royal London 360° saw sales up 37% to £209m.

However, the picture was less rosy for the protection side of the business with Bright Grey/Scottish Provident sales down 17% at £141m compared to £170m in H1, 2010.

Royal London Asset Management (excl cash mandates) reported net new business down 17% to £583m, after a particularly strong sales period the previous year. However, net new business for RLAM was up 288% in the second quarter compared with Q2 2010.

Meanwhile, the group's Ascentric wrap reported new assets under administration rose 34% to £741m, up from £552m in H1 2010.

Mike Yardley, group chief executive of Royal London, said: "The group has also achieved strong overall new business growth in challenging markets, with Scottish Life and Royal London 360° continuing to perform very well.

"RLAM has also contributed strong growth, though the half year comparison needs to be viewed in the context of very strong prior year figures. Ascentric has continued to grow strongly and has now moved into profitability.

"...I hope to be able to announce, in the near future, a positive conclusion to the exclusive discussions we are at present having with Co-operative Financial Services regarding the acquisition of their life fund and asset management business."