L&G Q1 New Business Results
Legal & General Group PLC
30 April 2003
Legal & General Group Plc
=========================
New business results - first quarter 2003
=========================================
• Resilient UK new business performance
• New institutional fund management business of £2.8bn
New business APE (Note 1) Q1 2003 Q1 2002 Change
UK total £200m £208m -4%
- life and pensions business £148m £155m -5%
- retail investment business £52m £53m -2%
International £23m £25m -8%
Total £223m £233m -4%
Note 1 - Annual Premium Equivalent (APE) is total new annual premiums + 10% of
single premiums for life, pensions and retail investment business.
Group Chief Executive, David Prosser, said: 'These are encouraging results for
Legal & General, achieved in difficult market conditions. We have seen our group
life and pensions business grow strongly. Although UK market demand for retail
investment products has been impacted adversely by equity market levels, our
sales have remained resilient. Our firm underwriting approach has been
maintained and we believe the profitability of UK sales, measured by the value/
premium ratio, compares favourably with the result achieved in 2002.
Our other UK business areas have also performed well. Legal & General Investment
Management has continued its impressive growth record, winning another £2.8bn of
new business. In addition, net premiums written by our General Insurance
business have grown by over 28%.
We expect conditions to remain difficult this year, but with our financial
strength and our good value product range, we believe we remain well positioned
to achieve profitable market share growth.'
UK new business
===============
New business was 4% lower at £200m APE (2002: £208m), with the decline in
individual business was being balanced by strong growth in group life and
pensions business.
Individual life
---------------
Annual premium sales for protection business were 6% lower at £32m (2002: £34m).
Despite this, Legal & General maintained its leading position in the housing
related market. Higher average premiums have largely counteracted a lower level
of new business applications. Demand for with-profits bonds fell sharply but
this was partly offset by the growing demand for unit-linked bonds, taking
single premium sales to £273m (2002: £401m).
Individual pensions
-------------------
New annual premium business at £29m was in line with the fourth quarter but fell
short of the corresponding quarter last year of £43m, which benefited from the
initial population of employer-sponsored stakeholder schemes. Single premium
business was more buoyant at £267m, an increase of 34% on the 2002 level of
£200m, with particularly strong growth in individual annuity business.
Unit trusts and ISAs
--------------------
Although the market experienced a sharp downturn in sales, our new business held
up in the quarter at £52m APE (2002: £53m). Our ISA volumes have fallen but this
has been largely offset by increased volumes of unit trust business from
institutional clients, bancassurance partners and specialist IFAs. Demand was
strongest for our UK Equity Index and Fixed Interest Trusts.
Group business
--------------
Group new business was £33m APE (2002: £18m), reflecting increased levels of
demand in the bulk purchase annuity market. In the first quarter of 2003, two
schemes together generated single premiums of some £130m but there has also been
a significant increase in the number of smaller schemes won.
Institutional fund management
=============================
Our institutional fund management subsidiary maintained its highly successful
track record by winning new business of £2.8bn in the quarter.
Group funds under management at 31 March 2003 were £116bn, unchanged from the
end of 2002 despite further falls in worldwide equity markets.
International business
======================
In the USA, we continued to develop our term assurance business with new annual
premiums increasingby 10% to $23m (2002: $21m).
Our European operations produced Eur. 13m APE (2002: Eur. 16m). Sales in the
Netherlands of Eur. 8m APE were 11% down on the first quarter last year
reflecting lower volumes of single premium business. In France, where market
conditions remain difficult, new business was Eur. 5m APE, (2002: Eur. 7m).
In sterling terms, sales from our international operations were £23m (2002:
£25m).
UK market outlook
=================
Volatility and uncertainty in equity markets worldwide have created difficult
operating conditions in the markets for our products in recent months. For Legal
& General, these difficult conditions have also had positive consequences.
Distributors have been attracted to our brand, financial strength and full
product range. As a consequence, we have been discussing and agreeing new
partnerships with a wide range of organisations in recent months. This bodes
well for our future new business prospects.
The outlook for our industry as a whole will be heavily influenced by the
performance of equity markets. We are cautious about the outlook for the rest of
this year but, longer term, we expect to see equity markets recover and for this
to stimulate a revival in consumer confidence in savings and other financial
products. We believe Legal & General's strengths will position us well to take
full advantage of the anticipated upturn.
For further information contact:
Investors: Peter Horsman Media: John Morgan
Head of Investor Relations Head of Public Relations
020 7528 6362 01737 375353
Anthony Carlisle
Citigate Dewe Rogerson
07973 611888
Notes:
1. A copy of this announcement can be found in the shareholder section of our
website at http://investor.legalandgeneral.com/releases.cfm
2. Financial Calendar:
24 July 2003 Interim results and second quarter new business
20 October 2003 Third quarter new business
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2003
NEW UK BUSINESS
---------------
Three months to
31 March inc/
2003 2002 (dec)
£m £m %
INDIVIDUAL LIFE AND PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 21 24
- Protection 11 10
Pensions:
- Individual pensions 29 43
----- ----- -----
Total new annual premiums 61 77 (21)
Single premiums
Life:
- With-profits 195 353
- Other 78 48
Pensions:
- Individual pensions 90 78
- Annuities - individual 160 99
- DSS rebates 17 23
----- ----- -----
Total single premiums 540 601 (10)
----- ----- -----
Individual life
and pensions APE 115 137 (16)
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs
(excluding cash ISAs) 6 9
- Unit trusts 1 2
----- ----- -----
Total new annual premiums 7 11 (36)
Single premiums
- ISAs/PEPs
(excluding cash ISAs) 120 206
- Unit trusts 328 218
----- ----- -----
Total single premiums 448 424 6
----- ----- -----
ISAs, PEPs and
unit trusts APE 52 53 (2)
Total individual business APE 167 190 (12)
GROUP LIFE AND PENSIONS BUSINESS
New annual premiums
- Group risk 7 6
- Group pensions 1 2
----- ----- -----
Total new annual premiums 8 8 0
Single premiums
- Annuities - bulk purchase 248 88
- Other group business 1 13
----- ----- -----
Total single premiums 249 101 147
----- ----- -----
Group life and pensions APE 33 18 83
----- ----- -----
Total UK APE 200 208 (4)
===== ===== =====
INSTITUTIONAL FUND MANAGEMENT
UK Managed Funds
- Pooled funds 2,751 2,548
- Segregated funds 12 420
----- -----
2,763 2,968
UK Other 65 36
----- ----- -----
Total fund management 2,828 3,004 (6)
===== ===== =====
WORLDWIDE NEW BUSINESS
----------------------
Three months to Three months to
31 March 2003 31 March 2002 inc / (dec)
Annual Single Annual Single Annual Single
£m £m £m £m % %
LIFE AND PENSIONS
Life 39 273 40 401 (3) (32)
Pensions 30 516 45 301 (33) 71
----- ----- ----- ----- ----- -----
UK 69 789 85 702 (19) 12
USA 14 1 15 0 (7) n/a
Netherlands 2 29 2 32 0 (9)
France 1 26 1 29 0 (10)
----- ----- ----- ----- ----- -----
INSURANCE TOTAL 86 845 103 763 (17) 11
RETAIL INVESTMENT BUSINESS
UK 7 448 11 424 (36) 6
France 5 7 (29)
----- ----- ----- ----- ----- -----
TOTAL NEW BUSINESS 93 1,298 114 1,194 (18) 9
===== ===== ===== ===== ===== =====
OVERSEAS OPERATIONS
IN LOCAL CURRENCY
-----------------
Three months to inc/
31 March (dec)
2003 2002 %
USA ($m):
New annual premiums 23 21
Single premiums 2 0
APE 23 21 10
Netherlands (Eur. m):
New annual premiums 4 4
Single premiums 42 53
APE 8 9 (11)
France (Eur. m):
New annual premiums 1 1
Single premiums 37 47
Unit trusts 7 11
APE 5 7 (29)
UK INDIVIDUAL APE BY CHANNEL
----------------------------
Annual Single Total APE
£m £m £m %
Independent financial advisers 32 63 95 57
Business partnerships 30 28 58 35
Business partners direct 3 3 6 3
Direct 3 5 8 5
----- ----- ----- -----
68 99 167 100
===== ===== ===== =====
Annual Single Total APE
£m £m £m %
Independent financial advisers 38 44 82 43
Business partnerships 38 43 81 43
Business partners direct 7 6 13 7
Direct 5 9 14 7
----- ----- ----- -----
88 102 190 100
===== ===== ===== =====
This information is provided by RNS
The company news service from the London Stock Exchange
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