Profit surge at Royal London due to increased sales in new business ventures
Royal London, the UK's largest mutual life insurance company, has reported a successful first half of 2025, with a focus on the Bulk Purchase Annuity (BPA) market and strategic asset diversification.
In the BPA market, Royal London has been leveraging its unique position as the only mutual insurer offering BPA products. The company completed eight buy-in transactions in the first half of the year, indicating active engagement in the BPA buy-in space. This strategic approach has helped Royal London differentiate itself in a competitive market where insurers must innovate to stand out.
Royal London's success in the BPA market is reflected in the growth of its individual pension sales, which rose three per cent to £2.4bn. The Irish market for pensions has also seen "massive growth" in recent years, according to Barry O'Dwyer, Royal London's boss.
In terms of asset-backed securities (ABS) and asset diversification, Royal London has been growing its Governed Range. This range, which includes allocations to real estate, commodities, and infrastructure investments, attracted £1.6 billion of net inflows in H1 2025. The recent acquisition of Dalmore Capital is a strategic move to enhance access to infrastructure and related investments within this portfolio.
The company's strong overall financial performance is evident in its operating profit, which increased by 15%, and its pre-tax profit, which rose by 15% to £166m in the first half of the year. Royal London's mutual status and ProfitShare scheme have benefited a broad customer base, with the company sharing £181mn with its 2.3m customers in April.
The Irish arm of Royal London also experienced significant growth, with new business sales growing 76 per cent to £227m. The arm holds a leading position in the Irish broker protection market and has secured further £142m in BPA premiums in the second half of the year.
Royal London's flagship fund offering, The Governed Range, saw an increase in net flows to £1.6bn. The company also launched two asset-backed securities funds. Gross inflows rose to £22.4bn in the first half of the year, and over 160,000 UK customers accessed Royal London's online guidance tools.
Engagement with Royal London's mobile app increased, with 50,000 more customers using it since the end of 2024, totaling 447,000 users. The company completed eight Bulk Purchase Annuity (BPA) buy-ins, securing £658m in premiums. New pension sales for businesses at Royal London increased slightly to £4.5bn.
In summary, Royal London is pursuing a dual strategy of niche market differentiation in BPA buy-ins as a mutual insurer and prudent asset diversification with a focus on stable, long-duration assets like infrastructure through its expanded asset-backed securities fund offerings. The company's strong performance in the first half of 2025 underscores its commitment to delivering long-term stable returns and mutual customer value.
- Royal London's success in the Bulk Purchase Annuity (BPA) market has encouraged the company to invest in technology, developing a mobile app that now boasts 447,000 users.
- Recognizing the potential in the Irish market, Royal London has been actively expanding its business operations, with new business sales growing 76 percent to £227m.
- To further enhance its financial portfolio, Royal London has been investing in various sectors, such as infrastructure, real estate, and commodities, through its Governed Range, which attracted £1.6 billion of net inflows in H1 2025.
