Insurer Legal & General’s operating profit rose a forecast-beating 18 per cent in the first half of its fiscal year, helped by strong performance in the bulk annuity market, the firm said.
Life insurers have looked to the bulk annuity market for new business as individual annuity sales dwindle following British pension reform, which give retirees more freedom over what to do with their pension pots.
Bulk annuity business involves insurers taking on the risk of all or part of company defined benefit, or final salary, pension schemes.
L&G’s operating profit rose to £750m in the six months to the end of June from a year earlier, against a forecast of £692m in a company-supplied poll.
Legal & General Investment Management’s assets under management rose 12 per cent from a year earlier to £715bn. But the asset management arm’s AUM dropped by 3 per cent over the second quarter.
L&G said it would pay an interim dividend of 3.45 pence a share, up 19 per cent from a year earlier.
Nigel Wilson, group chief executive, said: “Legal & General continues to deliver strong organic growth in the UK and the US from both our developing and established, market leading businesses. In addition we are disposing of, or closing non-core businesses and reducing costs in real and nominal terms.
“The actions that we are taking allow us to focus on our chosen markets, enable us to continue to deliver low prices and better value for our increasing customer base and deliver attractive returns for our shareholders.”