The amount of with-profits business remained ‘considerable’ in 2023, with Prudential continuing to dominate the market, according to ratings and information provider AKG.
The latest AKG UK Life Office With Profits Reports analysed 195 sub-funds within 64 funds from 21 companies active in the UK market at the end of December 2024.
The report found with-profits technical provisions totalled £208 billion at the end of 2023, down slightly from £211 billion in 2022, although this figure includes a small element of double-counting due to reinsurance.
However, in terms of net premiums, the total market size grew to £7.6 billion, up 11% from £6.8 billion in 2022.
The top 10 companies accounted for over 98% of the total with-profits market in 2023, up from 95% in 2022. The increase reflected 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.
Prudential remained the largest group in the market, accounting for 83% of net premiums earned during 2023, the analysis showed. It was followed by the Phoenix Group companies.
AKG said the total net market claims for 2023 are £21.1 billion, up 6% on the previous year.
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.”
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