Royal London’s new business sales of protection products fall 43% year-on-year, according to the mutual’s interim results for the first six months of 2022.
New protection business sales were down to £12m from £21m in the same period of last year while new business margin decreased from 3.1% to 2.2% as a result of the drop, the insurer noted.
Overall protection sales fell 16% to £569m in H1 2022 from £676m in H1 2021, which the group said reflected an an overall market contraction as customer demand for such products has reduced post pandemic.
This was “driven by a return to pre-pandemic levels of demand, along with pressure on disposable income caused by higher inflation”.
Over the period, the group revealed it paid out £304m in protection claims, supporting approximately 40,000 customers and their families.
Last year, the mutual set a new record for protection claims paid in a single year while new business from its UK protection division grew 44%, with new protection sales increasing from £27m in 2020 to £39m last year and overall UK protection sales up to £1.25bn from £1.192bn in 2020.
Royal London said following the launch of the Underwrite Later option last year, 94% of all life cover on business and relevant life plans can be put in force without waiting for medical evidence.
“We have also made a series of other improvements to our underwriting processes, increasing the speed at which we can offer cover to customers, while reducing the burden on the NHS,” it continued.
“Enhancements have also been made to our critical illness cover to increase the range of definitions under which we will make payment, helping to pay more claims when customers have suffered a life shock.”
However, in Ireland, new business protection sales grew to £8m from £6m and total sales of protection products in Ireland remain unchanged at £88m in H1 2022 compared with H1 2021.
£228m pre-tax loss
Overall the group reported a loss before tax of £228m compared with £228m profit in H1 2022 which it attributed to falls in equity and bond markets hitting the group’s longer term expected return assumptions for assets supporting life funds.
However across the group new business increased to £89m, up from £81m in H2 2021, driven by continued growth in sales of pension and annuity products.
This resulted in operating profit before tax pushing up to £109m from £80m in H1 2021 driven by the higher contribution from new business sales and lower corporate costs.
But assets under management decreased to £150bn from £164bn at the end of 2021, with net inflows offset by negative market movements.
Barry O’Dwyer, group chief executive at Royal London, (pictured) said: “We have seen strong growth in new business sales, helping to deliver a 36% increase in operating profit over the first half of the year.
“As the increased cost of living continues to create uncertainty, building customers’ financial resilience remains at the forefront of our priorities. In partnership with Wealth Wizards, we have delivered a free online tool which helps workplace pension members to assess and build their financial wellbeing.
“We are committed to supporting our members and customers to make the right, informed choices to protect their standard of living now and over the long term.”