L&G Q3 New Business Results
Legal & General Group PLC
16 October 2001
Legal & General Group Plc
New business to 30 September 2001
New business APE* Nine months to Nine months to
30/9/01 30/9/00
UK life and pensions
- individual £325m £280m +16%
- corporate £103m £50m +106%
UK unit trusts and ISAs £88m £69m +28%
Total UK £516m £399m +29%
International (inc. unit trusts) £69m £74m -7%
Total APE including unit trusts/ISAs £585m £473m +24%
New fund management business £9.0bn £9.6bn -6%
* Annual Premium Equivalent (APE) is total new annual premiums + 10% of
single premiums.
Group Chief Executive, David Prosser, said: 'Legal & General has delivered
excellent new business growth in 2001, with the third quarter being
another record for sales. We achieved good growth both from our IFA
channel and through our business partnerships, where the benefits of our
new relationships with Barclays and Alliance & Leicester are becoming
apparent.
Our investment management business continues to deliver remarkable
results. Since the beginning of 1998, it has averaged over £1 billion of
new business a month and has maintained that record in the last quarter
despite lower equity market levels. With over two thousand pension fund
clients we are a market leader and have both quality and depth in
management as well as technical expertise.
Legal & General provides a high degree of security for its customers
despite the volatility in equity markets. Throughout these difficult
market conditions we have continued to manage the business prudently.
Accordingly, we expect to continue to achieve above market growth whilst
still obtaining our desired return on capital.'
UK new business
===============
New business for the first nine months increased by 29% to £516m
(30/9/00: £399m), with the third quarter representing another record as
new business grew 37% to £191m APE (30/9/00: £139m).
Individual pensions
-------------------
Annual premium business in the first nine months grew by 38% to £84m
(30/9/00: £61m) of which £77m was written on Stakeholder terms. Growth
was particularly strong in the third quarter (up 79% to £34m).
At the end of September some 36,000 employers covering one million
potential scheme members had designated Legal & General as their
Stakeholder pensions provider - an additional 12,000 designations since
30 June 2001. With this high level of designations, Legal & General is
well placed to achieve its double-digit Stakeholder market share target.
We are supporting worksite marketing initiatives to encourage scheme
membership. Recent survey evidence shows that take-up may be slow
initially in those cases where there is no employer contribution.
Individual life
---------------
Annual premium sales in the first nine months increased to £101m
(30/9/00: £97m) as the strong position we have built up in the life
protection market has largely offset the new business impact of our
decision to withdraw our ISA mortgage repayment product in May.
Despite this decision, annual premium life sales in the third quarter
were maintained at £34m. The volumes of term business submitted and
underwritten through the internet have continued to grow.
Single premium bond sales in the first nine months were up sharply at
£843m (30/9/00: £550m), an increase of 53%, reflecting continuing high
levels of demand, especially for with-profits bonds. Third quarter
sales of £345m were 55% higher (30/9/00: £223m) supported by the
distribution strengths of our business partners.
Corporate business
------------------
Corporate new business in the first nine months more than doubled to
reach £103m APE, primarily as a result of our strength in the bulk
purchase annuity market. Bulk purchase annuity premiums increased by 390%
to £598m (30/9/00: £122m) following subdued demand in 2000. Future
business flows may be adversely impacted by the current volatility in
equity markets.
Unit trusts and ISAs
--------------------
New business APE reached £88m in the first nine months of the year, an
increase of 28% (30/9/00: £69m). In the third quarter, new business more
than doubled to £29m APE. Although markets have been volatile, customers
have continued to recognise the benefit of regular savings.
Distribution
------------
Our distribution mix has become more balanced as our major new business
partnerships have come on stream. Alliance & Leicester made their first
full quarter's contribution while Barclays rolled out our full product
range in their branch network in August. Allowing for lead times, the
impact of Barclays' business will be greater in the fourth and subsequent
quarters. The Woolwich has been offering Legal & General protection
policies in association with its mortgage products since 1 October.
International business
======================
In the USA, new business APE in the third quarter was $19m, an increase
of 19% on the third quarter last year. Comparisons with the first nine
months of 2000 are distorted by the effect of the introduction of the
'Triple X' solvency requirements, which boosted sales at the beginning of
that year.
Given that our business in the USA is a major provider of term assurance
for individual customers, it has inevitably been impacted by the
terrorist attacks of 11 September. Despite the difficulties in
establishing the full extent of claims, we do not currently expect our
liability from that event to exceed $10m net of reinsurance.
Our European businesses continue to show very strong growth, up 35% in
the first nine months to EUR. 50m. In France, new business has increased
by 17% to EUR. 28m APE (30/9/00: EUR. 24m), supported by strong growth in
group annual premium business. Sales in the Netherlands continued to
outperform the wider market, growing by an impressive 69% to EUR. 22m APE
(30/9/00: EUR. 13m).
Investment management
=====================
New fund management business secured in the first nine months of the year
totalled £9.0bn (30/9/00: £9.6bn). We have added 170 new pension fund
clients so far this year. Since the beginning of 1998, we have averaged
over £1bn of new UK pension business a month - a track record we believe
to be unequalled.
Outlook
=======
Notwithstanding current equity market volatility, we believe our
financial, brand, product and distribution strengths will enable us to
achieve further profitable business growth for the rest of the year and
into 2002. The need for our customers to save is not diminished, so
strong and successful providers will continue to have the opportunity to
increase both volumes and market share.
For further information contact:
Investors: Media:
Peter Horsman John Morgan
Head of Investor Relations Head of Public Relations
020 7528 6362 01737 375353
Anthony Carlisle
Citigate Dewe Rogerson
07973 611888
Note:
- A copy of this announcement can be found in the shareholder
section of our website at:
http://investor.legalandgeneral.com/releases.cfm
------------------------------------------------
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
NINE MONTHS TO 30 SEPTEMBER 2001
NEW UK BUSINESS
===============
Nine months to Three months to
30 September inc/ 30 September inc/
2001 2000 (dec) 2001 2000 (dec)
£m £m % £m £m %
INDIVIDUAL LIFE AND
PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 75 86 24 29
- Savings 0 1 0 1
- Protection 26 10 10 4
Pensions:
- Individual
pensions 84 61 34 19
Total new annual ----- ----- --- ----- ----- ---
premiums 185 158 17 68 53 28
Single premiums
Life:
- With-profits 774 468 315 201
- Other 69 82 30 22
Pensions:
- Individual
pensions 211 287 53 130
- Annuities -
individual 255 310 95 121
- DSS rebates 88 76 53 50
Total single ----- ----- --- ----- ----- ---
premiums 1,397 1,223 14 546 524 4
Individual life ----- ----- --- ----- ----- ---
and pensions APE 325 280 16 123 105 17
GROUP LIFE AND
PENSIONS BUSINESS
New annual premiums
- Group risk 25 25 9 11
- Group pensions 12 7 8 4
Total new annual ----- ----- --- ----- ----- ---
premiums 37 32 16 17 15 13
Single premiums
- Annuities - bulk
purchase 598 122 201 31
- Other group
business 69 58 32 25
Total single ----- ----- --- ----- ----- ---
premiums 667 180 271 233 56 316
Group life ----- ----- --- ----- ----- ---
and pensions APE 103 50 106 39 20 95
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs
(excluding cash
ISAs) 25 14 79 9 3 200
Single premiums
- ISAs/PEPs
(excluding cash
ISAs) 369 345 59 49
- Unit trusts 260 207 140 63
Total single ----- ----- --- ----- ----- ---
premiums 629 552 14 199 112 78
ISAs, PEPs and ----- ----- --- ----- ----- ---
and unit trusts APE 88 69 28 29 14 107
----- ----- --- ----- ----- ---
Total UK APE 516 399 29 191 139 37
===== ===== === ===== ===== ===
INSTITUTIONAL
FUND MANAGEMENT
UK Managed Funds
-Pooled funds 7,766 8,033 2,169 3,060
-Segregated funds 1,198 295 796 6
----- ----- ----- -----
8,964 8,328 2,965 3,066
UK Other 28 1,271 15 664
----- ----- --- ----- ----- ---
8,992 9,599 (6) 2,980 3,730 (20)
===== ===== === ===== ===== ===
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
NINE MONTHS TO 30 SEPTEMBER 2001
WORLDWIDE NEW BUSINESS
======================
Nine months to Three months to
30 September inc/ 30 September inc/
2001 2000 (dec) 2001 2000 (dec)
£m £m % £m £m %
New annual premiums
Life and pensions:
-Life 126 122 43 45
-Pensions 96 68 42 23
----- ----- --- ----- ----- ---
UK 222 190 17 85 68 25
-USA 38 52 12 12
-Netherlands 6 4 2 1
-France 6 4 1 1
Total life and ----- ----- --- ----- ----- ---
pensions 272 250 9 100 82 22
Retail investment
business:
-UK 25 14 9 3
Total new annual ----- ----- --- ----- ----- ---
premiums 297 264 13 109 85 28
Single premiums
Life and pensions:
-Life 843 550 345 223
-Pensions 1,221 853 434 357
----- ----- --- ----- ----- ---
UK 2,064 1,403 47 779 580 34
-USA 0 0 0 0
-Netherlands 77 30 15 8
-France 84 78 29 22
Total life and ----- ----- --- ----- ----- ---
pensions 2,225 1,511 47 823 610 35
Retail investment business:
-UK 629 552 199 112
-France 29 27 7 7
Total single ----- ----- --- ----- ----- ---
premiums 2,883 2,090 38 1,029 729 41
Equivalent premium income (APE)
-Life and pensions
business 494 401 23 182 143 27
-Retail investment
business 91 72 26 30 15 100
----- ----- --- ----- ----- ---
Worldwide APE 585 473 24 212 158 34
===== ===== === ===== ===== ===
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
NINE MONTHS TO 30 SEPTEMBER 2001
OVERSEAS OPERATIONS IN LOCAL CURRENCY
=====================================
Nine months to inc/ Three months to inc/
30 September (dec) 30 September (dec)
2001 2000 % 2001 2000 %
USA ($m):
New annual premiums 55 76 19 16
Single premiums 1 1 0 0
APE 55 76 (28) 19 16 19
Netherlands (EUR. m):
New annual premiums 10 8 4 3
Single premiums 125 50 22 15
APE 22 13 69 6 4 50
France (EUR. m):
New annual premiums 10 6 1 2
Single premiums 135 130 44 42
Unit trusts 46 46 9 15
APE 28 24 17 6 8 (25)
UK INDIVIDUAL APE BY CHANNEL
============================
Nine months to 30 September 2001
Annual Single Total APE
£m £m £m %
Independent financial adviser 114 123 237 57
Business partnerships 73 55 128 31
Direct 23 25 48 12
----- ----- ----- -----
210 203 413 100
===== ===== ===== =====
Nine months to 30 September 2000
Annual Single Total APE
£m £m £m %
Independent financial adviser 92 120 212 61
Business partnerships 59 24 83 24
Direct 21 33 54 15
----- ----- ----- -----
172 177 349 100
===== ===== ===== =====
Three months to 30 September 2001
Annual Single Total APE
£m £m £m %
Independent financial adviser 40 42 82 54
Business partnerships 32 31 63 41
Direct 5 2 7 5
----- ----- ----- -----
77 75 152 100
===== ===== ===== =====
Three months to 30 September 2000
Annual Single Total APE
£m £m £m %
Independent financial adviser 32 46 78 66
Business partnerships 18 10 28 23
Direct 6 7 13 11
----- ----- ----- -----
56 63 119 100
===== ===== ===== =====
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