TIDMLGEN
RNS Number : 6258Y
Legal & General Group Plc
07 December 2017
Legal & General Group plc
7 December 2017
Legal & General on track for a record year in 2017
Legal & General Group Plc ("L&G") today updates on its
trading performance.
L&G continues to see great momentum in all its businesses in
the year to date and has experienced particularly strong growth in
recent weeks. We remain strategically well placed to deliver
strong, attractive growth and returns in our core markets.
Legal & General Retirement ("LGR") has delivered total sales
for 2017 to date(1) of GBP6.2bn, with the business showing strong
momentum in the UK and US institutional pension risk transfer
markets, as well as in individual annuities and lifetime
mortgages.
Annuity sales generated GBP4.5bn of annuity premium, consisting
of: GBP3.3bn of UK institutional pension risk transfer business,
$0.7bn of US institutional pension risk transfer business and
GBP0.6bn of UK retail annuities. We have doubled our institutional
pension risk transfer business in the US versus 2016 and have now
written over $1.6bn of US business since entering the market. LGR
sales for 2017 to date also include GBP0.8bn of longevity
insurance.
We have significantly outperformed the market in the retail
space, with UK individual annuity premiums up 93%, equivalent to a
14% market share. We have written over GBP0.9bn of lifetime
mortgage advances, an increase of 71%, and our innovative, digital
lifetime mortgage business now has a leading 35% market share.
Our UK and US pipeline for pension risk transfer is the largest
it has ever been. Additionally we expect the UK's ageing
demographic and extensive use of cash drawdowns to make the
lifetime mortgage market increasingly attractive.
Legal & General Investment Management ("LGIM") achieved
total external net inflows of GBP38.1bn to the end of October.
Inflows were well-diversified by product line and geography. Our
liability driven investments ("LDI"), active fixed and property
funds delivered strong performances, and LGIM continues to be the
market leader in defined benefit and defined contribution solutions
in the UK, and a global market leader in LDI.
By the end of October, International net inflows were GBP26.1bn,
with GBP11.3bn from the US and, encouragingly, a further GBP10.9bn
from Europe. Our US asset management business continues to deliver
with over 330 institutional clients and over $170bn of assets. We
have established our regional office in Tokyo to complement our
capabilities in Hong Kong, and LGIM's recently-announced entry into
the European ETF market will provide access to one of the fastest
growing segments in asset management.
Legal & General Capital ("LGC") has generated GBP256m of
gross proceeds from transactions with a gross value of GBP821m to
the end of October and has committed and invested GBP319m to new
investments as it continues to recycle investments into new
strategic UK real asset opportunities. Our investment programme in
housing, urban regeneration, clean energy and scale-ups continues
to make good progress. Since October, LGC has also announced the
acquisition of its second later living business, Renaissance
Villages, for a net purchase price of GBP51m, and the acquisition
of a second major housing site, Arborfield in Berkshire, with
capacity and planning consent for 1,500 units.
Legal & General Insurance ("LGI") continued to benefit from
our strong market shares in UK retail protection and US term
assurance with total gross written premiums to the end of October
up 6%(2) to GBP2.1bn. The management actions taken to address the
adverse claims experience reported in our Group Protection business
in H1 2017 are becoming evident and experience is improving in line
with management expectation, and the first half losses have been
completely reversed in H2.
General Insurance ("GI") gross written premiums are up 13% to
GBP305m by the end of October. We continue to increase our direct
to consumer sales, have launched our market leading digitally
innovative SmartQuote proposition and we have been successful in
winning further distribution agreements for our household products.
In October we agreed to acquire Buddies, a pet insurance provider,
which will enable us to further diversify our product range in GI.
Following our adverse claims experience in the first quarter of the
year, we took management action which has mitigated the ongoing
impact of claims on the GI result.
Our business growth is supported by a strong balance sheet with
a Solvency II surplus of c.GBP6.9bn and a shareholder coverage
ratio of 190%(3) .
Nigel Wilson, CEO, commented:
"L&G is on track for a record year for earnings and profits.
Our core business divisions are generating formidable momentum.
With yesterday's announcement of the sale of our closed book, in
run-off Mature Savings business for GBP650m, our business is now
well-positioned and focused on the products and geographies where
we see optimum growth and cultural alignment. Our market leading
positions and strong balance sheet, coupled with our management
capability is allowing us to benefit from global growth
opportunities."
1. At 6 Dec 2017
2. Increase versus 31 October 2016. LGI comparison excludes disposed business (L&G Netherlands).
3. At the end of October, the Group's estimated Solvency II
surplus was c.GBP6.9bn with Eligible Own Funds of c.GBP14.6bn, a
Solvency Capital Requirement ("SCR") of c.GBP7.7bn and a
shareholder basis coverage ratio of 190%. In line with our
practice, this assumes that Transitional Measures for Technical
Provisions are recalculated to current market conditions, as we
believe this provides the most up to date and meaningful view of
our Solvency II position. The shareholder basis adjusts for the Own
Funds and SCR attributable to our With-profits fund and the final
salary pension scheme. Legal & General Group's core
subsidiaries are rated AA- by Standard & Poors
ends
For further information, please contact:
Investors:
Laura Doyle Head of Investor Relations 020 3124 2088
Sujee Rajah Investor Relations Manager 020 3124 2047
Media:
John Godfrey Corporate Affairs Director 020 3124 2090
Graeme Wilson Tulchan Communications 020 7353 4200
Notes to editors:
Legal & General Group Plc:
1. Established in 1836, Legal & General is a leading
provider of insurance, savings and investment management products
in the UK. The Group has a market capitalisation of GBP15.6bn (as
at 6 December 2017) and is responsible for investing GBP951bn
worldwide (as at 30 June 2017) on behalf of investors,
policyholders and shareholders.
2. Legal & General has over seven million customers in the
UK for life assurance, pensions, investments and general insurance
plans and over one million customers in the US who rely on us for
life assurance.
3. For full year 2016, Legal & General's adjusted operating
profit (IFRS basis) was GBP1,628m and adjusted earnings per share
were 22.20p for the period, an increase of 11% and 19%
respectively. Net release from operations (net cash) was up 12% to
GBP1,411. Full year dividend was up 7% to 14.35p, with adjusted
return on equity at 19.6%.
4. In H1 2017, Legal & General's operating profit was up 27%
to GBP988m with earnings per share up 41% to 15.94p. Total release
from operations was up 13% to GBP824m. An interim dividend of 4.30p
was announced, return on equity rose to 26.7% and the Solvency II
coverage ratio was 186%.
5. Legal & General is listed on the London Stock Exchange
with the ticker symbol LGEN.LN and has an American Depositary
Receipt ticker symbol OTC:LGGNY. Further information on our ADR
program can be found here:
http://www.legalandgeneralgroup.com/investors/adr.html
For more information on Legal & General, please see
http://www.legalandgeneralgroup.com/
Forward-looking statements
This announcement may contain certain forward-looking statements
relating to Legal & General, its plans and its current goals
and expectations relating to future financial condition,
performance and results. By their nature, forward-looking
statements involve uncertainty because they relate to future events
and circumstances which are beyond Legal & General's control,
including, among others, UK domestic and global economic and
business conditions, market related risks such as fluctuations in
interest rates and exchange rates, the policies and actions of
regulatory and Governmental authorities, the impact of competition,
the timing impact of these events and other uncertainties of future
acquisition or combinations within relevant industries. As a
result, Legal & General's actual future condition, performance
and results may differ materially from the plans, goals and
expectations set out in these forward-looking statements and
persons reading this announcement should not place reliance on
forward-looking statements. These forward-looking statements are
made only as at the date on which such statements are made and
Legal & General Group Plc does not undertake to update
forward-looking statements contained in this announcement or any
other forward-looking statement it may make.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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