Final Results

RNS Number:2501B
Royal London
10 April 2006



Royal London Group

Embargoed until 7.00 hrs 10th April 2006

Results - 12 months ending 31 December 2005

Strong Growth across all Royal London brands


Highlights

   *#325m value added to the Group in 2005 (IFRS basis), after paying #193m
    bonuses to policyholders

   *Excellent investment return on the Royal London Fund of 17.4%

   *Strong capitalisation - 183% of required regulatory capital

   *Funds under management up 17% to #28.9bn

   *Successful #400m subordinated debt issue in final quarter

Commenting on the results Mike Yardley Royal London's Group Chief Executive
said:

"The addition of #325m to the Royal London Group's value during 2005 is an
impressive result in a highly competitive market. We have also announced our
results on an achieved profits basis, a first I believe for a mutual insurance
company.

We received strong support from institutional investors for our subordinated
debt issue in December 2005. The transaction, which raised some #400m in the
capital markets, was subscribed almost three times over, an indication that
institutional investors back our approach to building the business.

Royal London has once again demonstrated our ability to compete successfully and
add value for the benefit of our members."

Royal London Group Finance Director, Stephen Shone, in commenting further on the
Group's results, said:

"Royal London has adopted International Financial Reporting Standards (IFRS) in
our accounts for 2005 - and we have restated 2004 results on an equivalent
basis. We have adopted these standards in the interests of best practice and
improved disclosure, although they are not a mandatory requirement for the
Group.

Our working capital is represented by an amount known as the "Unallocated
Divisible Surplus" (UDS). This is the capital unallocated to with-profits
policyholders but after making provision for both annual and final bonuses on
those policies. Our UDS showed a healthy and improving capital position,
increasing by #325m in 2005 to #1,571m at the end of the year.

Royal London's total regulatory free asset ratio was 17.3% at the end of 2005
(2004 10.5%). The free asset ratio for with-profits business was 32.1% (2004
18.1%)."

Stephen Shone continued:

"To provide greater insight for analysts and investors we have supplemented our
usual results with figures on an "achieved profits" basis. In announcing
achieved profits we are enabling commentators to make direct comparison with plc
competitors.

Our total achieved profits before tax in 2005 were #478m (Note 1). Achieved
profits after tax totalled #335m representing a net return on embedded value of
30%. Of this, #325m was recognised within the increase in the UDS in our balance
sheet.

New business contributed #37m to Royal London Group's gross achieved profits in
2005, a margin of just over 15% of our annual premium equivalent (Note 2) new
business of #242.6m. Our pensions business Scottish Life contributed #14m,
Bright Grey #8m, Scottish Life International (SLI) #5m and Royal London #10m.

New business margins currently available in the pensions market place are
relatively low, particularly from group pensions, but we are optimistic that
initiatives taken in 2005 to improve our pensions profitability will continue to
bear fruit in 2006. Protection business and the offshore business written by SLI
is generally higher margin and contributes proportionately more to the value of
new business. The Royal London business is very largely incremental business
with low acquisition expenses.

The expected return on the opening value of the business contributed #91m in
2005, while experience variances (the impact of the difference between
demographic, expense and persistency assumptions and actual experience in the
year) resulted in a pre-tax charge of #9m. During 2005, we changed the
assumptions for future levels of expenses and persistency to reflect actual
experience and anticipated future experience. These changes reduced the achieved
profit result by #13m before tax.

Other items (mainly general insurance commission received, development expenses
and group overheads) reduced profits by #18m, resulting in an achieved operating
profit before tax of #88m.

Returns achieved on the underlying assets in 2005 were considerably greater than
assumed, which contributed #387m before tax. As a result of movements in
prevailing economic conditions, the economic assumptions adopted have been
updated from those used at the end of 2004. The combination of these effects
contributed #3m to the pre-tax result of #478m."

(1) All achieved profits figures are unaudited.
(2) Annual Premium Equivalent (APE) is the industry standard measure of new
regular premiums plus 10% of single premiums.

                                      ENDS

Copies of Royal London's full Report and Accounts 2005 and Summary Financial
Statements are available from the company's website at
www.royallondongroup.co.uk.

For further information please contact:

Royal London
Gareth Evans, Head of Corporate Affairs                     020 7506 6715

Mainland PR
Neil Mainland                                               020 3008 7400

Editor's Notes:

Royal London was founded in 1861, initially as a friendly society, and became a
mutual life insurance company in 1908. Royal London is one of the stronger life
and pension companies in the UK, with a current rating of 7/10 from Cazalet
Financial Consulting, and has a particularly strong track record for with
profits performance.

The Royal London Group has funds under management of #28.9 billion. Group
businesses serve over 3 million customers and employ 2885 people.

(Figures quoted are as at 31 December 2005)




                      This information is provided by RNS
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