Regulatory News Service
05 December 2016
LEGAL & GENERAL GROUP CAPITAL MARKETS EVENT
Legal & General Group Plc ("Legal & General") will host a conference for investors and analysts on Monday 5 December at 1 Coleman St, London, EC2R 5AA. The event starts at 3.00pm, and will include presentations on the Group's strategy, balance sheet, risk management, and its insurance, retirement, capital and investment management divisions. At the event, Legal & General will disclose that it expects current full year forecast for net cash generation will be circa £1.4 billion and net surplus generation of £1.1 billion pre market and other movements.
Nigel Wilson, Group CEO, said: "Legal & General's global growth opportunities within each division, value driven products, growing loyal customer base and strong balance sheet, underpin our confidence in delivering sustained growth in net cash generation, profits and dividend to our shareholders. Our ambition is to repeat a similar operational performance in 2015-2020 to that achieved in 2010-2015."
Group Strategy and Growth Opportunities
Three of Legal & General's divisions: Legal & General Retirement (LGR); Legal & General Investment Management (LGIM); and Legal & General Insurance (LGI) are strongly positioned to capitalise on significant structural growth opportunities arising from geopolitical, economic and demographic changes.
Legal & General Capital (LGC) is focused on direct investments, which over time are expected deliver ROCE of greater than 10%, where the funding gap in the UK for housing, urban regeneration and SME finance is over £500 billion.
LGIM's assets under management of £841.5 billion have increased 180% since the Global Financial Crisis and we expect its core strategic markets of Defined Contribution, Defined Benefit, solutions and index to present significant global growth opportunities.
LGR has written over 1,500 deals since we began writing bulk annuity business in 1987. In 2016 we have written a record £6.9 billion of new annuity sales as at 2 December. This has been achieved with a Solvency II new business strain of 2-3% of premium on which we expect to achieve payback in four years. On an EEV basis the new business margin is circa 13%. In addition we have made more than £0.5 billion of lifetime mortgage advances. There remains a huge opportunity in the UK, which has £2.1 trillion in defined benefit liabilities, of which only 5% has transferred to buy-out to date. In the US, the market opportunity is even greater.
LGI has over 7 million customers in the UK and US, and has 25% market share in the UK retail protection market. LGI intends to leverage its UK insurance expertise to grow its protection business, scale and technology in the US.
Financial Strength
Legal & General's strong balance sheet underpins our confidence in driving new business growth and shareholder returns. As at 30 June 2016, Legal & General had Solvency II own funds of £13.7 billion and surplus of £5.3 billion with a solvency coverage ratio of 163% [1]. Our S&P credit rating is AA-. The Group has moved to a capital efficient business model for writing new annuity business. In addition our diversified business model serves to reduce the Group's overall Solvency II new business strain. This capital efficiency means we are targeting average annual growth in Solvency II net surplus generation over the next five years to be in the mid to high single digit percentage range.
[1] Shareholders basis, 158% pro forma basis
The presentation will start at 3.00pm and will be webcast live at http://www.legalandgeneralgroup.com
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:
Richard King Head of Group Corporate Communications 020 3124 2095
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 £14.4bn (as at 2nd December 2016) and is responsible for investing £841.5bn worldwide (as at 30 June 2016) 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. In 2015, Legal & General's operating profit (IFRS basis) was £1,455m and adjusted earnings per share were 18.58p for the period, an increase of 14% and 11% respectively. For H1 2016 Legal & General's adjusted operating profit was £822m, an increase of 10%, profit before tax attributable to equity holders was £826m, an increase of 23%, adjusted earnings per share were 11.20p for the period, an increase of 14%, and net cash generation of £727m, an increase of 16%.
4. Net surplus generation is defined as the Solvency II expected release less new business strain.
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.
