Royal London CEO Barry O’Dwyer has told Health & Protection that the mutual is interested in further merger and acquisition activity if it can find the right situation.
If an individual protection book like Aegon’s were to come up again, Royal London would be interested in owning it, O’Dwyer revealed to Health & Protection.
He was speaking following the announcement that Royal London will be acquiring Aegon UK’s individual protection book, subject to court approval.
O’Dwyer (pictured) acknowledged there was a double edged sword to buying other protection insurers and reducing the market players, but argued that advisers would be pleased Royal London would be the new owner.
“Part of me wants to see a thriving and competitive protection market and therefore if there was no further M&A then I wouldn’t be that worried about that,” he said.
“But if there was something like this book available, then I think we would be very interested in being the owner of it.
“We think bluntly that we’re a better owner than many of the alternatives that a business like this could have gone to.
“So from our perspective and from an adviser’s perspective, I think advisers will be really glad that this book has ended up at Royal London, which is a business that’s passionate about the value of impartial advice.
“From that perspective I think I would rather Royal London was the home for business like this than the alternatives that might be available.”
O’Dwyer highlighted that Aegon customers would continue to benefit from that insurer’s added value services until being transferred over.
However, it is then hoped they will be offered Royal London’s respective services from that point on.
‘In addition to organic growth’
Elaborating on the reasons for the deal, O’Dwyer revealed that while the financing of the deal is not being disclosed at this point, Aegon represents a good fit for Royal London’s existing business.
“We have over 900,000 existing customers. This adds another about 400,000 on top but they are customers that have been introduced to the market by IFAs so it’s a type of business that we know well and it’s got a great strategic fit with the rest of Royal London,” he continued.
“So from our perspective, this was an opportunity to add a material number of additional customers into Royal London which ultimately allows us to fulfil our purpose with these customers, but to do so in one fell swoop which is in addition to the organic build that we achieve through competing in the market.”
But O’Dwyer added the deal also reflected Royal London’s mantra of ‘protecting today and investing for tomorrow’.
“Protecting today is all about helping customers to protect themselves and their families against shocks. Investing for tomorrow refers to the rest of our business which is around helping people to save for retirement,” he said.
“So, from our perspective this is a very natural fit with what we do. It allows us to help more customers protect their families and build their financial resilience.
“We’re different because we’re mutual. So customers aren’t a means by which we make profits for shareholders. We’re run for the benefit for our customers. So, for us it’s about making sure we can help as many customers as we possibly can to build their financial resilience.
“And so when an opportunity like this presents itself to allow us to look after more customers, then we’ll take it.”
‘We are committed to this market’
And in terms of advisers and the customers they serve, O’Dwyer expressed hopes that they will be reassured that these customers have ended up with Royal London.
“My message to advisers is that I hope that they are reassured that their customers have ended up with a business like Royal London which is passionate about the value of impartial advice and I hope and expect that they will see no disruption to their businesses as a result of this deal.
“To the customers I am really looking forward to welcoming them to Royal London. We are committed to this market and to this business line.
“We’re very, very good at what we do in terms of claims handling and servicing and we’re recognised at being leaders in this field and so I would say to them that I am confident that they are in safe hands.”