Contained in the Royal London Group’s results was a statement which said following a “strategic review, Royal London 360° is changing its international focus from single premium business to the higher margin regular premium business”.
Natalie Hall, director of marketing at Royal London 360°, said: “Royal London 360° has always ensured that any business we write is at a minimum profit threshold, and the margins in the single premium market in the UK are now so fiercely low that we’d prefer to walk away from the business than write it at a loss to simply grab headline APE.
“In contrast, the international regular premium market, with our products such as Quantum and Paragon, can deliver far more attractive profit margins.”
Royal London 360° also said it has been running a successful “wrap strategy” which it intends to “ramp up”. Under the strategy Royal London 360° either offers its products via wrap platforms directly or does so as “white-labelled” products. So far it has launched white labelled products for James Hay, Nucleus and Novia and this month is to launch one with Acsentric – a wrap platform owned by the Royal London Group.
In terms of sales, the first quarter did see a dip for Royal London 360°, with its new business falling by 23% compared with the first quarter of 2011. However, Hall explained this was to be expected as the firm changes its focus away from the big ticket, low margin single premium business and that in fact its Annual Premium Equivalent (a measure of the longer term profitability of business on the books) had actually increased by 26% for its regular premium business.
