L&G Q1 New Business Results
Legal & General Group PLC
28 April 2004
28 April 2004
Legal & General Group Plc
=========================
New business results - first quarter 2004
=========================================
• Continuing progress in core retail life and pensions
• Record £5.4bn new institutional fund management business
New business APE (1) Q1 2004 Q1 2003 Change
UK retail business
- life and pensions £131m £115m +14%
- retail investments £39m £52m -25%
- total retail business £170m £167m +2%
UK group life and pensions £23m £33m -30%
UK total £193m £200m -4%
Worldwide total £215m £223m -4%
New institutional fund management £5.4bn £2.8bn +93%
(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 results show further good
progress for Legal & General, with our core UK retail life and pensions business
continuing to grow well in sluggish markets. Legal & General Investment
Management had a record quarter, winning another £5.4bn of new business. £1.3bn
of this was for active bond management, developing momentum in our strategy of
building this aspect of the business.
In UK group business, the quarter on quarter comparisons are distorted by large
single payments for bulk purchase annuity business, where we have maintained a
firm underwriting approach. In contrast, group risk business has performed well.
Independent financial advisors and other distributors continue to recognise the
strength of our life and pensions product range. We believe Legal & General's
strengths will enable us to gain further market share and to do so profitably.'
Overview
========
In the UK, retail business continued to benefit from our broad spread of good
value products and our wide distribution network with strong growth in life and
pensions business, stable ISA volumes but lower unit trust sales. In the
corporate market, we made good progress in group risk business but in bulk
purchase annuities, new business volumes remained variable although the level of
quotation requests remains high.
In local currency terms, our Continental European businesses have shown good
growth in single premiums and in the USA new annual premium business was broadly
maintained.
Legal & General Investment Management achieved further strong growth in funds
under management with a record quarter, winning £5.4bn of new business,
including substantial growth in actively managed bonds.
UK new business
===============
Individual life
---------------
Annual premium sales for protection business were 16% higher at £37m (2003:
£32m) as Legal & General maintained its leading position in the housing related
market.
Demand for with-profits bonds remained relatively subdued at £123m (2003:
£195m). However, this was more than offset by strong demand for unit-linked
bonds, especially property linked funds, taking total single premium sales for
the quarter to £384m (2003: £273m), up 41%.
Individual pensions
-------------------
New annual premium business at £28m was broadly in line with the corresponding
quarter last year (2003: £29m). Single premium new business also changed little
at £273m (2003: £267m) as lower levels of DWP rebates were offset by an increase
in individual annuity business.
Unit trusts and ISAs
--------------------
ISA and unit trust sales in the first quarter fell to £39m APE (2003: £52m).
Regular payment sales were maintained and single payment ISA sales increased
slightly. However, single payment unit trust sales at £201m were down from £328m
in the corresponding quarter last year when we benefited from a number of large
unit trust purchases by institutional clients.
Group life and pensions
-----------------------
Group new business was £23m APE (2003: £33m), as good progress in group risk
business was more than offset by lower levels of bulk purchase annuity business.
Group risk new annual premiums nearly doubled to £13m (2003: £7m). Single
premiums for bulk purchase annuity business, where we continued to maintain
pricing discipline, were £91m compared to £248m in the corresponding quarter
last year. This result was ahead of the final quarter of 2003 but the first
quarter of 2003 benefited from two bulk purchase annuity schemes, which together
generated single premiums of some £130m.
Institutional fund management
=============================
Our institutional fund management business had another excellent quarter winning
record new business of £5.4bn (2003: £2.8bn). Of this total, £1.3bn was for
active bond business, reflecting our successful strategy of developing this
aspect of the business. New index fund business, which included one particularly
large mandate, almost equalled the previous record in the fourth quarter of
2001.
At 31 March 2004, funds managed by Legal & General Investment Management
exceeded £143bn.
International business
======================
In the USA, new business was broadly maintained at $22m APE (2003: $23m) as we
continued to develop our term assurance business.
Our Continental European operations produced increased new business of €16m APE
(2003: €13m) as annual premium business was stable but single premium life and
pensions business grew by 34%.
In sterling terms, total new business was broadly maintained at £22m APE (2003:
£23m) but increased at constant exchange rates.
UK distribution and outlook
===========================
We continue to focus additional effort on the IFA market, which we believe
continues to offer good growth opportunities for Legal & General. In the first
quarter, this resulted in an increase in volumes and the share of business from
this distribution channel. We are pleased to announce that we have been
successful in securing a place on Sesame's short panel (Protection Select Plus)
for term assurance.
Major partnership distribution developments in the quarter include Sainsbury's
Bank, which has chosen to offer Legal & General term assurance to the 11 million
customers who shop regularly in Sainsbury's supermarkets. Enquiries are handled
through our direct call centre, which then uses our online functionality to give
an immediate decision.
In addition to growing direct distribution, we have continued to grow our tied
relationships, while building our mortgage network to maximise opportunities in
the new regulatory environment, which takes effect from 1 October this year.
We expect the current stability in equity markets will lead to improved consumer
confidence in savings and other financial products. At the same time we expect
the trend of market share concentration to continue. All this maintains our
confidence that Legal & General's strengths in products and distribution will
enable us to gain further market share and to do so profitably.
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:
29 July 2004 Interim results and second quarter new business
20 October 2004 Third quarter new business.
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2004
NEW UK BUSINESS
===============
Three months to
31 March increase/
2004 2003 (decrease)
£m £m %
INDIVIDUAL LIFE AND
PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 25 21
- Protection 12 11
Pensions:
- Individual pensions 28 29
------ ------ ------
Total new annual premiums 65 61 7
Single premiums
Life:
- With-profits 123 195
- Other 261 78
Pensions:
- Individual pensions 87 90
- Annuities - individual 182 160
- DWP rebates 4 17
------ ------ ------
Total single premiums 657 540 22
------ ------ ------
Individual life and pensions APE 131 115 14
====== ====== ======
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs(excluding cash ISAs) 6 6
- Unit trusts 1 1
------ ------ ------
Total new annual premiums 7 7 0
Single premiums
- ISAs/PEPs (excluding cash ISAs) 122 120
- Unit trusts 201 328
------ ------ ------
Total single premiums 323 448 (28)
------ ------ ------
ISAs, PEPs and unit trusts APE 39 52 (25)
------ ------ ------
Total individual business APE 170 167 2
====== ====== ======
GROUP LIFE AND PENSIONS BUSINESS
New annual premiums
- Group risk 13 7
- Group pensions 1 1
------ ------ ------
Total new annual premiums 14 8 75
Single premiums
- Annuities - bulk purchase 91 248
- Other group business 1 1
------ ------ ------
Total single premiums 92 249 (63)
------ ------ ------
Group life and pensions APE 23 33 (30)
------ ------ ------
Total UK APE 193 200 (4)
====== ====== ======
INSTITUTIONAL FUND MANAGEMENT
UK Managed Funds
- Pooled funds 4,412 2,751
- Segregated funds 962 12
------ ------
5,374 2,763
UK Other 57 65
------ ------ ------
Total fund management 5,431 2,828 92
====== ====== ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2004
WORLDWIDE NEW BUSINESS
======================
Three months to
31 March increase/
2004 2003 (decrease)
£m £m %
Annual premiums
Life and pensions:
- Life 50 39
- Pensions 29 30
------ ------ ------
UK 79 69 14
- USA 12 14
- Netherlands 3 2
- France 0 1
------ ------ ------
Total life and pensions 94 86 9
Retail investment business:
- UK 7 7
------ ------ ------
Total new annual premiums 101 93 9
Single premiums
Life and pensions:
- Life 384 273
- Pensions 365 516
------ ------ ------
UK 749 789 (5)
- USA 0 1
- Netherlands 40 29
- France 30 26
------ ------ ------
Total life and pensions 819 845 (3)
Retail investment business:
- UK 323 448
- France 3 5
------ ------ ------
Total single premiums 1,145 1,298 (12)
Annual Premium Equivalent (APE)
- UK life and pensions business 154 148
- Overseas life and pensions business 22 23
------ ------ ------
Total life and pensions business 176 171 3
- UK retail investment business 39 52
- Overseas retail investment business 0 0
------ ------ ------
Total retail investment business 39 52 (25)
------ ------ ------
Worldwide APE 215 223 (4)
====== ====== ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2004
OVERSEAS OPERATIONS
IN LOCAL CURRENCY
=================
Three months to increase/
31 March (decrease)
2004 2003 %
USA ($m):
New annual premiums 22 23
Single premiums 0 2
APE 22 23 (4)
Netherlands (€m):
New annual premiums 4 4
Single premiums 60 42
APE 10 8 25
France (€m):
New annual premiums 1 1
Single premiums 46 37
Unit trusts 6 7
APE 6 5 20
UK INDIVIDUAL APE BY CHANNEL
============================
Three months to 31 March 2004
Annual Single Total APE
£m £m £m %
Independent financial advisers 38 63 101 60
Business partnerships 28 28 56 33
Business partners direct 1 1 2 1
Direct 4 7 11 6
------ ------ ------ ------
71 99 170 100
====== ====== ====== ======
Three months to 31 March 2003
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
====== ====== ====== ======
This information is provided by RNS
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