Profit Increase at Royal London Fuelled by New Business Sales
Royal London, the UK's largest mutual life insurance company, has had a successful year in the Bulk Purchase Annuity (BPA) market. The company's foray into this sector has proven to be a game-changer, making it the only mutual BPA option in the UK market.
In the first half of the year, Royal London's gross inflows rose to £22.4bn, and assets under management jumped by £3bn, reaching £75bn. This impressive growth was driven in part by the company's BPA business, which contributed to an operating profit increase of 15%.
Royal London entered the BPA market in September 2024, and by mid-2025, it had completed eight buy-in transactions, including a notable £85 million buy-in with The College of Law Pension and Assurance Scheme. The company also secured an additional £142m in BPA premiums in the second half of the year.
The BPA offering from Royal London has been particularly attractive to pension scheme trustees, especially those of smaller schemes, due to its mutual pricing and an alternative to non-mutual insurers. This has resulted in a growing market presence and supporting profit expansion.
The bulk purchase annuity market has expanded in recent years with new entrants like Royal London, Utmost, and Blumont, increasing competition and capacity. Despite market challenges, this competition has helped maintain attractive pricing.
As a mutual insurer, Royal London has no shareholders; instead, profits benefit eligible customers through its ProfitShare scheme. In 2025, the company shared £181 million with 2.4 million customers, thanks to strong financial performance partly driven by BPA growth.
Royal London's success in the BPA market extends to its Irish arm, where new business sales grew by 76%, reaching £227m. The Irish broker protection market has seen "massive growth" according to CEO David O'Dwyer, contributing to Royal London's success in the market.
In addition to its BPA business, Royal London also launched two asset-backed securities funds and experienced an increase in net flows to £1.6bn in its flagship fund, The Governed Range. The company also acquired infrastructure asset manager Dalmore Capital to support its BPA proposition.
Transfer to the fund for appropriations at Royal London declined sharply to £115m, and new pension sales for businesses increased to £4.5bn. The insurance company's trustees had a positive reaction to the company's results due to strong performance metrics.
Overall, Royal London's BPA buy-ins have materially contributed to its profit growth in 2025, supported by a competitive market position as the only mutual BPA provider, helping it secure multiple buy-in deals and strengthen overall profitability.
- Royal London's success in the Bulk Purchase Annuity (BPA) market has not only been a significant factor in its profit expansion but also an attractive investment opportunity for businesses.
- The growing BPA market, with new entrants like Royal London, has increased competition, leading to maintained attractive pricing for customers and supporting the finance sector's development.
- To further strengthen its BPA proposition, Royal London made strategic acquisitions, such as infrastructure asset manager Dalmore Capital, and launched asset-backed securities funds, showcasing its commitment to expanding its business through technology and finance.
