Royal London Group made a £762m loss after tax last year and saw its capital surplus shrink by £1.1bn due to poor investment markets.
The weak performance comes despite a 6% rise in UK life and pensions business as Scottish Life increased its presence in the income drawdown market.
On an IFRS basis, the group made a £432m loss after tax, down from a £130m profit during 2007. Performance was worst on an EEV basis, making a £762m loss after tax, compared with a profit of £173m in 2007.
Royal London's Insurance Groups Directive (IGD) capital surplus fell to £773m at the end of 2008, down from £1.9bn at the end of 2007, a £1.1bn fall. The firm says £685m of the reduction is due to goodwill and assets acquired as part of its Resolution transaction not being admissible for regulatory capital.
Mike Yardley, chief executive of Royal London, says: "The last year has been a period of unprecedented turbulence in investment markets and of global economic slowdown.
"We are, of course, major investors in the equity, property and corporate bond markets and the investments of the Royal London with-profits fund have inevitably fallen significantly with the performance of these markets in 2008.
"Arguably, one would regard the fall in markets coupled with the banking crisis during 2008 as being a 'one in 200 year event'. Despite this, our realistic capital position remains strong, with a surplus of £1,182m, and is more than sufficient to withstand a further 'one in 200 year event'."
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till