Legal & General: £4.0bn of Retirement new business sales in H1 2016, as Lifetime Mortgages overtake individual annuities
Legal & General Group Plc ("Legal & General") today said that its Retirement Division had experienced strong new business sales in H1 2016, with minimal disruption caused by uncertainties over the EU Referendum. New bulk annuity transactions totalling c.£250m were executed in June.
Following the £2.9bn Aegon back-book transaction in May, this brings bulk annuity business executed in H1 2016 to £3.6bn, over £1bn ahead of the full year bulk annuity sales figure of £2.4bn for 2015.
Lifetime mortgage sales have exceeded £200m in H1 2016 meaning these too have surpassed the full year comparator for 2015, as well as being greater than our individual annuity sales in H1 2016.
Legal & General Retirement sales across bulk annuities, individual annuities and lifetime mortgages of £4bn have been achieved in H1 2016.
Kerrigan Procter, Managing Director of Legal & General Retirement, said:
"Political and market uncertainty around the EU Referendum did not get in the way of business, as companies or individuals will always need to manage their employees' or own retirement. Bulk annuity transactions continue to be an important way for Legal & General to deploy capital to help our UK clients, and use the premiums to invest in real assets such as UK infrastructure and direct lending."
Legal & General Retirement now provides more lifetime mortgages to its customers than individual annuities. We expect this trend to accelerate as more baby boomers retire and choose to access their housing wealth to help fund their retirement, instead of buying an individual annuity.
Bernie Hickman, CEO of Legal & General Home Finance, added:
"Legal & General entered the lifetime mortgage market last year. Our lowest interest rate on lifetime mortgages is now below 5%, and we have recently been awarded Lifetime Mortgage Lender of the year. We have seen rapid growth, and within a year of entering the lifetime mortgage market, now provide more lifetime mortgages to our customers than individual annuities. Individual annuities still have their place, but customers want more choice in how they fund their retirement, with accessing housing wealth being an attractive option for asset rich, income poor retirees."
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For further information, please contact:
Investors:
Laura Doyle Head of Investor Relations 020 3124 2088
Stephen Thomas Investor Relations Manager 020 3124 2047
Media:
John Godfrey Corporate Affairs Director 020 3124 2090
Richard King Head of Group Corporate Communications 020 3124 2095
Notes to editors:
Legal & General Group Plc:
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 £11bn (as at 29 June 2016) and is responsible for investing £746bn worldwide (as at 31 December 2015) on behalf of investors, policyholders and shareholders. 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. In 2015, Legal & General's operating profit (on the IFRS basis) was £1,455m and adjusted earnings per share were 18.58p for the period, an increase of 14% and 11% respectively.
For more information on Legal & General, please see http://www.legalandgeneralgroup.com/
Legal & General Retirement
Legal & General Retirement has participated in the insurance solution pension de-risking market for nearly 30 years and was voted Risk Reduction Provider of the Year at the 2016, 2014 and 2013 UK Pensions Awards and Risk Management Provider of the Year at the Pensions Age Awards 2014. Legal & General was also voted Insurer of the Year at the 2014 Insurance Risk Awards, Winner of the Engaged Investor Trustee Awards in 2015, and Derisking Provider of the year at the Pensions Expert's Pension and Investment Provider Awards 2015. Legal & General provides annuities to pensioners and has completed a number of landmark transactions. These include the $900m deal with Philips in the US in partnership with The Prudential Insurance Company of America in 2015, the £3bn bulk annuity arrangement with the ICI Pension Fund, the largest bulk annuity policy arranged by a pension scheme in the UK to date, secured in March 2014, the UK's largest medically underwritten deal for £230m with Kingfisher in December 2015 and the £3.2bn longevity insurance transaction with the BAE Systems 2000 Pension Plan in February 2013. Legal & General manages £43.4bn of annuity assets as at 31 December 2015.
Legal & General offers a range of de-risking solutions, which includes buyout, buy-in, longevity insurance and liability-driven investment (LDI), to pension schemes of all sizes. Legal & General is also able to tailor a combination of LDI and longevity insurance to provide "DIY buy-in" solutions. Legal & General has expertise in investment management, all aspects of defined benefit provision as well as an in-depth understanding of mortality trends and longevity risk. The excellent services we are able to provide also include payroll, administration and communications services. LGR is multi award winning business, and in 2016 has been awarded: UK Pensions Awards - De-risking Provider of the Year, aiCIO's European Innovation Awards - Swap and Buy-in Provider of the Year, and European Pensions Awards - Buyout Firm of the Year
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.
