AKG’s annual UK Life Office With Profits Reports show consistent technical provisions, with net premiums and net claims increasing

AKG expert: The arrival of Consumer Duty has underlined the importance of existing business management for clients in closed funds

AKG, the specialist provider of assessment, ratings, information and market assistance to the financial services industry, has released its latest UK Life Office With Profits Reports which provide a complete picture of the evolving With Profits scene.

The 2024 series of reports – the 28th annual edition – contain analysis and assessments of 195 sub-funds within 64 funds from 21 companies active in the UK market at the end of December 2024. Key findings in the reports include:

Technical provisions1

 
 

The amount of With Profits business in-force remains considerable. With Profits technical provisions totalled £208bn at the end of 2023, showing a slight reduction from £211bn in 2022, although this figure includes a small element of double-counting due to reinsurance.

The top 10 companies are little changed in 2023 and accounted for over 98% (2022: 95%) of the total With Profits market in 2023; the increase over 2022 reflecting the addition of two new companies in the top 10 now that the previous Phoenix Life Assurance Ltd and Standard Life With Profits funds are within Phoenix Life Ltd. The Phoenix Group companies totalled £33.2bn and remains the second largest group – but still only around one third the size of the largest, Prudential Assurance.

Net premiums2

Measured by net premiums earned, the top 10 companies accounted for around 98% of the market in 2023 with Prudential continuing to dominate, with an increased 83% (2022: 80%) of net premiums earned. The total market size grew to £7.6bn, up by 11% from £6.8bn in 2022 with Prudential increasing 16% to £6.3bn, up from £5.5bn in 2022.

 
 

Net claims3

The total net market claims for 2023 are £21.1bn, up 6% on 2022 (2022: £20.0bn). 

Matt Ward, Communications Director at AKG, said: “The With Profits concept can sometimes be written off by people in terms of its pertinence but as can be seen from our reports there is still a huge amount of client money invested in With Profits funds. The arrival of Consumer Duty has underlined the importance of existing business management for clients in closed funds and the development of With Profits fund links on platforms and broader interest in ‘smoothed’ fund solutions is showcasing the evolution of new business in the intermediary market.

“It is vital that when client circumstances dictate, advisers, paraplanners, EBCs and trustees can put themselves in a position to adequately assess the market and make informed decisions about With Profits funds and providers via support from this type of independent output.”

 
 

AKG’s UK Life Office With Profits Reports provide an independent and unparalleled With Profits picture. At over 1,200 pages in length the reports are designed to assist advisers, paraplanners, trustees and other analysts in assessing the relative merits of specific With Profits funds. Whilst providers can utilise the output to inform key With Profits market intelligence requirements.

Each individual report provides information on the structure and operation of a provider’s With Profits fund(s). It also highlights the various risks borne by with profits policyholders and concludes with AKG’s long established Ratings for: With Profits Financial Strength; With Profits Future Performance; and With Profits Transparency. A number of comparative industry-wide tables are also included, covering a range of key metrics.

Please contact AKG at akg@akg.co.uk for further details about the reports and purchasing terms.

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