Royal London’s new business sales of protection products fell by 72% year-on-year, according to the mutual’s full-year 2022 results.
The results reveal new business from protection fell to £11m in 2022 from £39m in 2021, which had been a 44% increase from £27m in 2020.
Overall, protection product premiums in 2022 fell 17% to £1,037m, which the group attributed to “increasing competition in a broadly flat market”.
Offering clarification on the decline in new protection business sales over the past six months, a Royal London spokesperson told Health & Protection the full year figures reflected full year assumptions on a new business contribution basis, including higher interest rates as well as its exit from the over 50s life insurance market.
Last summer Royal London revealed new business sales of protection products had fallen 43% year-on-year in its interim results for the first six months of 2022.
At the time new protection business sales were down to £12m from £21m in the same period of 2021 while new business margin decreased from 3.1% to 2.2% as a result of the drop.
Over the year Royal London paid out £590m in protection claims supporting approximately 74,000 customers and their families.
It also pointed to the delivery of a dashboard to provide online, proactive updates to advisers and reduce demand on servicing teams which had been accessed 140,000 times at the end of January, and the launch of the MyRoyalLondon portal for protection customers.
The insurer added that it broadened its critical illness definitions to increase coverage for certain heart conditions and to improve children’s cover and extended the use of its Underwrite Later approach to cover more products and sums assured.
And it said it had widened capturing of nominated beneficiaries for whole of life customers, helping claims to be paid more quickly, and improved its underwriting approach for mental health disclosures, allowing decisions to be made more swiftly or cover to be provided in more situations.
Operating profit up 58%
The group’s Ireland operation saw protection new business unchanged at £17m, with all protection sales rising to £198m in 2022 from £185m in the previous year.
Overall across the group’s entire business, operating profit before tax grew by 58% to £210m.
Royal London said adverse market impacts on asset management revenues were more than offset by the benefits from a continuing focus on cost control, growing the annuity portfolio, and consolidating and simplifying closed funds.
Life and pensions new business sales were up 12% to £10.8bn from £9.6bn in 2021 which the group said reflected the post-pandemic increase in both individual and workplace pension flows, a strong UK employment market, and the relative performance of its governed range.
But group assets under management fell from £164bn in 2021 to £147bn in 2022 despite the net inflows, as falls in equity and bond markets adversely affected underlying asset values.
Barry O’Dwyer, group chief executive at Royal London, (pictured) said: “In 2022 we concluded our programme to simplify our business. As a direct result, Royal London has been able to increase the value of our long-standing customers’ policies by £675m in total through the consolidation of closed with-profits funds.
“We have also successfully modernised many elements of our business, introducing more efficient digital services for over four million customers whose policies have been moved onto enhanced systems.
“During the year we have continued to see good growth, delivering a 12% increase in new business sales in 2022. Supported by our focus on cost efficiency as we have streamlined our operations, this has driven a 58% increase in operating profit.”