Auto-enrolment drives record new business at Scottish Life

Scottish Life has posted record new business results for the 12 months to 31 December, with total life and pensions business valued at £2.4bn.

This was up 8% from the previous year which stood at £2.25bn. Ewan Smith, managing director of Scottish Life, said the results were solid despite the difficult economic background.

He said the fourth quarter of last year saw sales of £662m, which were 48% higher than the same period in 2011.

The majority of new business came from group pension sales, which reported a 21% increase while personal pension sales were up 2% year on year.

Smith explained: "A lot of the growth we are seeing is coming from the group market. That reflects the significant uptick in adviser activities with employers ahead of auto-enrolment.

"The group market has been so heavily influenced by commission in the last few years. The combination of auto-enrolment and the Retail Distribution Review (RDR) means this area of the market is going to be subject to the largest amount of change."

Smith said Scottish Life had operated a RDR compliant charging structure for several years, so the results had not been affected by a rush to ‘beat the commission ban' in the run up to 1 January 2013.

"For us 2012 was all about making RDR work, making auto-enrolment work. The huge change that was happening throughout the industry was not going to happen passively. It required engagement.

"We worked with advisers as close as we possibly could to help them understand how the new world would shape up."

Scottish Life said it would continue to expand into the at-retirement consolidation market through its GRIPs investment strategies for income drawdown.

Royal London Group will announce its 2012 full results, including full new business results for the group, on 28 March.