By Scott Wright

ROYAL London has revealed it has paid out claims to the families of more than 1,200 customers whose deaths were attributable to Covid-19, as the fall-out from the virus led it to report a first-half loss.

Unveiling its results for the six months ended June 30, the life insurance and pensions mutual said the pay-outs totalled around £8.5 million. It booked a £10m charge in the first half to allow for further claims in the future. The mutual, which employs 1,460 people in Edinburgh, said: “There remains uncertainty over the eventual impact of the pandemic including both future rates of mortality, as well as the wider health impacts from the deferral of non-Covid-19 related medical treatments.”

Royal London reported an interim loss of £181m, following a £397m profit at the same stage last year, amid falls in real asset values and a reduction in bond yields.

The firm, which has a total of 1,561 employees in Scotland where it used to trade as Scottish Provident and Bright Grey, said life and pensions new business sales were down 18% at £4.8bn. It attributed the decline to difficult trading conditions during lockdown in the second quarter, noting that companies had deferred decisions to move pension scheme providers, and that individuals had delayed investment decisions.

On the asset management side, net inflows were significantly lower, at £997m versus £5.47bn at the halfway stage last year. Royal London noted that strong internal flows and growth in demand for sustainable funds were partially offset by external institutional outflows, particularly in the segregated fixed income and cash funds. Assets under management were “stable” at £139bn.

Chief executive Barry O’Dwyer said: “Our focus has been on supporting customers and advisers through the challenges associated with Covid-19. In particular, we have supported policyholders who have difficulty paying premiums due to their personal circumstances by encouraging them to contact us to arrange a practical way forward to maintain cover.”

He added: “Covid-19 will inevitably continue to have an impact on new business prospects. Looking further ahead, our strong capital position and unrivalled reputation with advisers and customers will stand us in good stead as we continue to help customers meet their protection, investment and long-term savings needs.”