More than two million Royal London customers will receive a share of a generous £181 million profit distribution, set to be paid out in April 2024. This payment comes as part of the mutual insurer’s long-standing ProfitShare scheme, which benefits customers with life and pension policies.
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A Year of Strong Profits and Record Contributions
In 2024, Royal London reported robust growth across its operations, boosting both its profits and the value of its customer base. The company’s operating pre-tax profit surged by 11% to reach £277 million, up from £249 million the previous year. This increase was attributed to heightened new business contributions and a growing portfolio of in-force policies.
Barry O’Dwyer, the CEO of Royal London, credited the positive results to the insurer’s strong product offerings and its commitment to customer-centric services. “Royal London is customer-owned and is run for the benefit of customers, not shareholders,” O’Dwyer explained. “Our ProfitShare scheme is a testament to this, as we share our profits with eligible customers, distributing £181 million to 2.3 million customers in April.”
The Key Highlights of 2024 for Royal London:
- Payout Breakdown: More than 2 million customers will receive a slice of the £181 million profit share payout, a substantial increase from 2023’s £163 million.
- Record-Breaking Pension Scheme Sign-ups: Nearly 1,000 new employers joined Royal London’s workplace pension scheme in 2024, resulting in 240,000 new scheme members.
- Pension Fund Growth: The company’s assets under management grew significantly, reaching £72 billion, up from £61 billion in 2023.
- Protection Claims: Royal London paid out 98.7% of protection claims, amounting to £751 million for over 65,000 customers in the UK and Ireland.
An Expanding and Stronger Business Portfolio
Royal London’s strong financial performance was supported by its expanding customer base and diverse offerings. One of the major success stories of 2024 was the continued popularity of the company’s “governed range” funds, which attracted net inflows of £3.2 billion.
In addition to solidifying its position in the life and pension markets, Royal London made significant strides in the bulk purchase annuity market, becoming a key player as the only customer-owned provider in this sector. This further strengthened the company’s market position and continued its trend of profitable and responsible growth.
Challenges and Concerns for the Future
While the financial year ended positively for Royal London, CEO Barry O’Dwyer did voice concerns about the broader pensions landscape. He expressed unease over potential government interference in the pensions industry, particularly the proposed Pension Schemes Bill from the Labour Party. The bill aims to encourage pensions to invest more heavily in British infrastructure and private companies, but O’Dwyer warned that this could undermine the primary role of pensions: securing the retirement income of customers.
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Looking Ahead: Royal London’s Strategy and Vision
Royal London’s results are reflective of its broader strategy to balance profitability with a deep commitment to customers. The company’s focus on customer ownership and profit-sharing remains a cornerstone of its business model, distinguishing it from shareholder-driven firms. As the firm continues to grow and diversify, the £181 million profit share payout is a tangible demonstration of its dedication to its customers and their financial well-being.
With a continued commitment to strong returns, diversified investments, and a customer-first ethos, Royal London is poised to maintain its strong position in the financial services sector for years to come.
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