1st Quarter Results to 31 March 2000
Legal & General Group PLC
12 April 2000
Legal & General Group Plc
New Business Results - First Quarter
UK individual life and pensions - up 22%
International - up 30%
Funds under management - up 22%
First quarter First quarter
2000 1999
UK individual life and £84m £69m
pensions*
UK corporate life and £17m £27m
pensions*
UK unit trusts and ISAs* £29m £31m
International business* £26m £20m
Worldwide* £156m £147m
New fund management £2.3bn £2.9bn
business
Funds under management £107bn £88bn
* Equivalent Premium Income (EPI) - i.e. total new annual premiums
+ 10% of single premiums.
Group Chief Executive, David Prosser, said: 'We have had a good start to
the year. As we move towards next year's introduction of Stakeholder
pensions, we are particularly encouraged by the 39% growth in group
personal pension business.
'Our investment management business goes from strength to strength
- adding £2.3bn of funds in the first quarter, after the exceptional
new business result in 1999. With £107bn under management we are one
of the UK's leading fund management houses.
'Internationally, I am also pleased with the continued strong growth
produced by our business in the USA.
'In summary, our strategy of good value products provided through
multi-channel distribution has continued to build market share. The
skills and strengths of our investment management business are a key
differentiator for Legal & General. We are very well positioned for
continuing growth.'
UK business
===========
Investment management
---------------------
Our investment management business provides asset management expertise
to Legal & General's retail and corporate businesses, as well as to the
trustees of pension schemes and other institutional clients. After an
exceptional year in 1999, our investment business attracted a further
£2.3bn in new funds under management (1999: £2.9bn). Total funds under
management exceeded £107bn at the end of the quarter - an increase of 22%
over the past twelve months. This underlines Legal & General's position
as a major UK investment house and a leading provider of index tracking
funds.
Pensions
--------
Growth in group personal pensions business has more than offset the
decline in sales in the individual personal pensions market ahead of the
launch of Stakeholder pensions. New individual pension and annuity
business, including group personal pensions, increased 21% to £40m
EPI (1999: £33m).
We are continuing to develop relationships with employers, trade unions
and other affinity groups to ensure that we are well positioned for the
introduction of Stakeholder pensions in April 2001.
Year on year comparison for the bulk purchase annuity business is
distorted by the inclusion of £130m of business for a single client in
the first quarter of 1999. Excluding this, new corporate business was
£10m EPI - an 11% increase.
Life
----
New retail annual premium business over the quarter grew by 43% to £30m
(1999: £21m) building on the strong growth achieved in 1999. Single
premium bond sales were £140m, close to the level of £144m achieved in
the first quarter of 1999. Our group risk business continued to make
good progress with new annual premiums increasing by 40% to £7m (1999:
£5m).
Unit trusts and ISAs
--------------------
Single payment unit trust sales more than doubled to £78m (1999: £35m).
Single payment ISA sales were £183m in the first quarter (1999: £272m)
reflecting our decision not to promote specialist high technology funds.
Our recently launched internet ISA offering, generated single payments
of over £20m by 5 April - another positive demonstration of the potential
for e-commerce in our business.
International business
======================
The Group's international operations continued to grow rapidly, producing
£26m EPI, an increase of 30%.
Our business in the USA continued to produce very strong results, further
reinforcing its position as one of the major specialist writers of term
assurance. New annual premiums increased by 33% to $32m (1999: $24m).
Sales in the Netherlands grew by 33% to Dfl 8m EPI (1999: Dfl 6m)
reflecting the positive customer response to our new universal life
product launched last year. In France, new business increased by 32% to
Ffr 41m EPI (1999: Ffr 31m) with single premium business benefiting
particularly from the launch of a new unit linked fund.
For further information contact:
Investors: Peter Horsman Media: John Morgan
Investor Relations Manager Head of Public Relations
020 7528 6362 01737 375353
Anthony Carlisle
Citigate Dewe Rogerson
020 7638 9571
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2000
NEW UK BUSINESS
===============
Three months to
31 March increase/
2000 1999 (decrease)
£m £m %
RETAIL LIFE AND
PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 27 17
- Savings & Protection 3 4
Pensions:
- Individual pensions 20 19
--- --- ---
Total new annual premiums 50 40 25
Single premiums
Life:
- With profits 108 102
- Other 32 42
Pensions:
- Individual pensions 81 66
- Annuities - individual 99 44
- DSS rebates 21 33
--- --- ---
Total single premiums 341 287 19
Retail life --- --- ---
and pensions EPI 84 69 22
CORPORATE LIFE AND
PENSIONS BUSINESS
New annual premiums
- Group risk 7 5
- Group pensions 2 2
--- --- ---
Total new annual premiums 9 7 29
Single premiums
- Annuities - bulk purchase 57 185
- Other group business 19 14
--- --- ---
Total single premiums 76 199 (62)
Corporate life --- --- ---
and pensions EPI 17 27 (37)
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs
(excluding cash ISAs) 3 1 200
Single premiums
- ISAs/PEPs
(excluding cash ISAs) 183 272
- Unit trusts 78 35
--- --- ---
Total single premiums 261 307 (15)
ISAs, PEPs and --- --- ---
and unit trusts EPI 29 31 (6)
--- --- ---
Total UK EPI 130 127 2
=== === ===
---- ---- ----
PENSION FUND MANAGEMENT 2328 2913 (20)
==== ==== ====
WORLDWIDE NEW BUSINESS
======================
Three months to Three months to
31 March 2000 31 March 1999
Annual Single Annual Single
£m £m £m £m
LIFE AND PENSIONS
Life 37 140 26 144
Pensions 22 277 21 342
--- --- --- ---
UK 59 417 47 486
USA 20 0 15 0
Netherlands 1 11 1 10
France 1 21 1 15
--- --- --- ---
INSURANCE TOTAL 81 449 64 511
RETAIL INVESTMENT BUSINESS
UK 3 261 1 307
France 9 9
--- --- --- ---
TOTAL NEW BUSINESS 84 719 65 827
=== === === ===
OVERSEAS OPERATIONS
IN LOCAL CURRENCY
Three months to increase/
31 March (decrease)
2000 1999 %
USA ($m):
New annual premiums 32 24
Single premiums 0 1
EPI 32 24 33
Netherlands (D.Fl.m):
New annual premiums 4 3
Single premiums 40 32
EPI 8 6 33
France (F.Fr.m):
New annual premiums 8 8
Single premiums 229 149
Unit trusts 102 84
EPI 41 31 32
UK INDIVIDUAL EPI BY CHANNEL
============================
Three months to 31 March 2000
Annual Single Total EPI
£m £m £m %
Independent financial advisers 28 38 66 58
Business partnerships 20 7 27 24
Direct 5 15 20 18
--- --- --- ---
53 60 113 100
=== === === ===
Three months to 31 March 1999
Annual Single Total EPI
£m £m £m %
Independent financial advisers 21 33 54 54
Business partnerships 17 7 24 24
Direct 3 19 22 22
--- --- --- ---
41 59 100 100
=== === === ===
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