L&G Q1 2007 New Business
Legal & General Group PLC
26 April 2007
Legal & General Group Plc
26 April 2007 - Stock Exchange release
Q1 2007 New business results
Highlights:
• UK new life and pensions up 27% to £303m APE(1)
• Worldwide new business increased by 6% to £413m APE
• £5bn of new investment management business
Tim Breedon, Group Chief Executive, said:
'Legal & General has made a good start to 2007 with quarterly new UK life and
pensions volumes up 27% to £303m APE. This represents 13 quarters of
uninterrupted growth in the company's core UK business at an annualised compound
average growth rate of over 20%. Overall the Group's worldwide new business rose
6% over the corresponding period last year.
'Underlying retail demand for our ISA and unit trust products was broadly in
line with the same period last year. However, overall unit trust sales were
lower than the first quarter of 2006 when the company benefited from higher
inflows of institutional business.
'Legal & General continues to extend its distribution reach having secured an
agreement with Nationwide, the UK's largest building society, to supply
protection, investment and pension products. A similar arrangement with
Intelligent Finance to become their sole provider of non advised life insurance
products is announced today. Both arrangements will begin to contribute to sales
in the second half of the year.
'In addition to extending our distribution, we continue to broaden our product
range with the launch of innovative group SIPP and protection products. We
believe the fundamentals for the UK economy continue to be positive for 2007. We
therefore remain confident of further profitable growth given the favourable
climate for our business.'
(1) 'Annual Premium Equivalent' comprises new annual premiums together with 10%
of single premiums
UK new business - up 6% to £383m APE
Protection - stable at £56m APE
In individual protection, new business grew by 8% to £42m APE (Q1 06: £39m APE).
With our commitment to quality of service, good value products and extending
distribution reach, we expect to continue building our market-leading position
during 2007. We look forward to the launch of our partnerships with Nationwide
Building Society and Intelligent Finance in the second half of the year.
Group protection new business fell by 18% to £14m APE (Q1 06: £17m APE) in a
subdued market, where advisors and customers remained focused on issues
surrounding Pensions A-Day and the new Age Discrimination legislation.
Annuities(2) - up 27% to £42m APE
Sales of individual annuities increased to £25m APE in Q1 07 (Q1 06: £5m APE),
in a more favourable environment. In the bulk purchase annuities market, Legal
& General won 45 policies in the first quarter of 2007 with an average size of
under £4m single premium and amounting to £17m APE (Q1 06: £28m APE). The
timing of scheme completions remains unpredictable and fewer completed in the
first quarter of the year. We saw increased competition for medium and large
sized schemes compared to the first quarter of 2006. In total, volumes of new
annuities business increased by 27% to £42m APE (Q1 06: £33m APE).
Unit linked bonds(2) - up 21% to £74m APE
New unit linked bond business grew by 21% to £74m APE in the first quarter of
2007 (Q1 06: £61m APE), driven mainly by the ongoing success of our Portfolio
Bond. An additional unit allocation promotion for Portfolio Bond customers was
launched in 2006 and enhanced in the second half of the year. This continued in
the first quarter of 2007, although the additional allocation was set at a lower
level.
Pensions(2) - up 68% to £69m APE
The changes to pensions legislation implemented in April 2006 - the A-Day
reforms - continued to provide a stimulus to the pensions market in the first
quarter of 2007. New non profit pensions business grew by 68% to £69m APE (Q1
06: £41m APE). Including both with-profits and non profit business, pensions
sales increased by 48% to £126m APE (Q1 06: £85m APE). We maintained our
targeted approach to growth, focusing on pensions transfers and corporate
schemes. Sales of our SIPP product continued to grow, with nearly two thirds of
new business written on platform during the quarter.
With-profits - up 29% to £62m APE
With-profits new business increased to £62m APE (Q1 06: £48m APE), reflecting
strong growth in pensions sales as mentioned above. As in previous periods,
these figures include unit linked contracts with a with-profits option.
Retail investments - down 35% to £80m APE
Retail investment product sales were £80m APE in Q1 07 (Q1 06: £124m APE), which
included £32m APE of institutional and wholesale business (Q1 06: £75m APE).
Single premium sales of ISAs and PEPs grew by 5% to £110m (Q1 06: £105m).
(2) Business not written in the with-profits part of the fund
International new business - up 11% to £30m APE
Total international sales grew by 11% in sterling terms to £30m APE (Q1 06: £27m
APE). In France, new business increased by 70% in local currency terms to €17m
APE (Q1 06: €10m APE), mainly as a result of strong growth in sales of savings
products and unit trusts. In the Netherlands, sales fell by 14% to €12m APE (Q1
06: €14m APE) while in the USA, volumes grew by 11% to $21m APE (Q1 06: $19m
APE).
Investment management - new business of £5bn
Legal & General Investment Management continued its impressive track record in
the first quarter of 2007 with £5.1bn of new business received (Q1 06: £5.6bn).
At 31 March 2007, total funds under management stood at £240bn (31 December
2006: £233bn).
Outlook
We remain confident in the fundamentals of the UK economy for 2007 and in the
potential for the UK's savings, protection and investment markets.
We believe Pensions A-Day and open architecture developments will continue to
provide a stimulus to the savings market. In bulk purchase annuities, we remain
confident that our experience and expertise in pricing, administration and
investment, combined with our financial strength, will enable Legal & General to
build on its strong position in this segment - one which has the potential for
significant further growth.
Further possible rises in interest rates, together with the removal of pensions
term assurance, may impact growth in the individual protection market. However,
we expect to strengthen our already market-leading position with new
distribution agreements launching later in the year.
We believe Legal & General has a compelling position in the UK, with the product
range, distribution, flexibility and commitment to quality of service needed to
achieve further success.
Enquiries to:
Investors:
Jonathan Maddock, Head of Investor Relations 020 7528 6298
Nicola Marshall, Investor Relations Manager 020 7528 6263
Media:
John Morgan, Media Relations Director 020 7528 6213
Anthony Carlisle, Citigate Dewe Rogerson 07973 611888
Notes:
A copy of this announcement can be found under 'Financial information' in the
'News releases' section of our shareholder web site at
http://investor.legalandgeneral.com/releases.cfm
Issued share capital at 31 March 2007 was 6,532,744,100 shares of 2.5p each.
Financial Calendar:
Annual General Meeting 16 May 2007
Banks and Building Societies seminar 5 June 2007
2007 Interim results and Q2 2007 New business results 26 July 2007
Q3 2007 New business results 17 October 2007
Q4 2007 New business results 24 January 2008
Forward-looking statements:
This document may contain certain forward-looking statements with respect to
certain of Legal & General Group Plc's plans and its current goals and
expectations relating to future financial condition, performance and results. By
their nature forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances which are beyond Legal & General
Group Plc's control, including, among others, UK domestic and global economic
and business conditions, market related risks such as fluctuations in interest
rates and exchange rates, the policies and actions of governmental and
regulatory authorities, the impact of competition, the timing impact and other
uncertainties of future mergers or combinations within relevant industries. As a
result, Legal & General Group Plc's actual future condition, performance and
results may differ materially from the plans, goals and expectations set out in
Legal & General Group Plc's forward-looking statements. Legal & General Group
Plc does not undertake to update forward-looking statements contained in this
document or any other forward-looking statement it may make.
Legal & General Group Plc
Unaudited New Business Premiums
Three months to 31 March 2007
WORLDWIDE NEW BUSINESS
Three months to 31 March 2007 Three months to 31 March 2006
Annual Single APE Annual Single APE Increase/
premiums premiums premiums premiums (decrease)
£m £m £m £m £m £m %
_____________________________________________________________________________________________________________________
Protection
- Individual protection 42 - 42 39 - 39 8%
- Group protection 14 - 14 17 - 17 (18%)
_____________________________________________________________________________________________________________________
56 - 56 56 - 56 0%
Annuities
- Individual - 253 25 - 56 5 400%
- Bulk purchase - 165 17 - 277 28 (39%)
_____________________________________________________________________________________________________________________
- 418 42 - 333 33 27%
Savings
- Unit linked bonds - 739 74 - 605 61 21%
- Individual pensions - stakeholder
and other non profit 43 251 68 27 142 41 66%
- DWP rebates - 11 1 - - - N/A
_____________________________________________________________________________________________________________________
43 1,001 143 27 747 102 40%
With-profits
- Annuities - 18 2 - 20 2 0%
- Individual pensions 34 223 56 28 131 41 37%
- DWP rebates - - - - 17 2 (100%)
- Group pensions 1 1 1 1 1 1 0%
- Bonds - 26 3 - 21 2 50%
_____________________________________________________________________________________________________________________
35 268 62 29 190 48 29%
_____________________________________________________________________________________________________________________
134 1,687 303 112 1,270 239 27%
UK retail investment business
- Unit trusts 2 638 66 1 1,090 110 (40%)
- ISAs 3 110 14 3 105 14 0%
5 748 80 4 1,195 124 (35%)
_____________________________________________________________________________________________________________________
_____________________________________________________________________________________________________________________
Total UK new business 139 2,435 383 116 2,465 363 6%
_____________________________________________________________________________________________________________________
- USA 11 - 11 11 - 11 0%
- Netherlands 3 56 8 3 59 9 (11%)
- France 2 78 10 1 59 7 43%
_____________________________________________________________________________________________________________________
16 134 29 15 118 27 7%
France retail investment business - 6 1 - 5 - N/A
_____________________________________________________________________________________________________________________
Total international new business 16 140 30 15 123 27 11%
_____________________________________________________________________________________________________________________
Total worldwide new business 155 2,575 413 131 2,588 390 6%
_____________________________________________________________________________________________________________________
Legal & General Group Plc
Unaudited New Business Premiums
Three months to 31 March 2007
WORLDWIDE NEW BUSINESS APE QUARTERLY PROGRESSION
3 months 3 months 3 months 3 months 3 months
to to to to to
31.03.07 31.12.06 30.09.06 30.06.06 31.03.06
£m £m £m £m £m
______________________________________________________________________________________________________________________
Protection
- Individual protection 42 45 44 39 39
- Group protection 14 14 17 16 17
______________________________________________________________________________________________________________________
56 59 61 55 56
Annuities
- Individual 25 24 26 16 5
- Bulk purchase 17 29 24 22 28
______________________________________________________________________________________________________________________
42 53 50 38 33
Savings
- Unit linked bonds 74 80 60 60 61
- Individual pensions - stakeholder
and other non profit 68 59 55 52 41
- DWP rebates 1 1 - - -
______________________________________________________________________________________________________________________
143 140 115 112 102
With-profits
- Annuities 2 1 3 2 2
- Individual pensions 56 36 42 46 41
- DWP rebates - 2 10 2 2
- Group pensions 1 - 1 - 1
- Bonds 3 2 2 2 2
______________________________________________________________________________________________________________________
62 41 58 52 48
______________________________________________________________________________________________________________________
303 293 284 257 239
UK retail investment business
- Unit trusts 66 217 78 191 110
- ISAs 14 14 13 27 14
______________________________________________________________________________________________________________________
80 231 91 218 124
______________________________________________________________________________________________________________________
Total UK new business 383 524 375 475 363
______________________________________________________________________________________________________________________
- USA 11 10 11 10 11
- Netherlands 8 7 6 7 9
- France 10 7 5 13 7
______________________________________________________________________________________________________________________
29 24 22 30 27
France retail investment business 1 - 1 1 -
______________________________________________________________________________________________________________________
Total international new business 30 24 23 31 27
______________________________________________________________________________________________________________________
Total worldwide new business 413 548 398 506 390
______________________________________________________________________________________________________________________
Legal & General Group Plc
Unaudited New Business Premiums
Three months to 31 March 2007
INVESTMENT MANAGEMENT
Three months to 31 Increase/
March (decrease)
2007 2006
£m £m %
______________________________________________________________________________________________________________________
UK Managed Funds
- Pooled funds 4,922 3,763 31%
- Segregated funds 68 61 11%
______________________________________________________________________________________________________________________
4,990 3,824 30%
UK Other 69 1,739 (96%)
______________________________________________________________________________________________________________________
Total new funds 5,059 5,563 (9%)
______________________________________________________________________________________________________________________
INVESTMENT MANAGEMENT QUARTERLY PROGRESSION
3 months 3 months 3 months 3 months 3 months
to to to to to
31.03.07 31.12.06 30.09.06 30.06.06 31.03.06
£m £m £m £m £m
______________________________________________________________________________________________________________________
UK Managed Funds
- Pooled funds 4,922 5,801 3,814 4,500 3,763
- Segregated funds 68 1 8 538 61
______________________________________________________________________________________________________________________
4,990 5,802 3,822 5,038 3,824
UK Other 69 159 109 157 1,739
______________________________________________________________________________________________________________________
Total new funds 5,059 5,961 3,931 5,195 5,563
______________________________________________________________________________________________________________________
INTERNATIONAL OPERATIONS IN LOCAL CURRENCY
Three months to 31 March 2007 Three months to 31 March 2006 Increase/
Annual Single APE Annual Single APE (decrease)
premiums premiums premiums premiums %
______________________________________________________________________________________________________________________
USA ($m): 21 - 21 19 - 19 11%
Netherlands (€m): 4 83 12 5 86 14 (14%)
France (€m):
- Life and pensions 4 116 16 1 86 10 60%
- Unit trusts - 9 1 - 7 - N/A
______________________________________________________________________________________________________________________
UK INDIVIDUAL APE BY CHANNEL
Three months to 31 March 2007
Annual Single Total
APE % of
£m £m £m total
______________________________________________________________________________________________________________________
Independent financial advisers 95 1,503 245 70%
Tied 25 709 96 27%
Direct 4 57 10 3%
______________________________________________________________________________________________________________________
Total 124 2,269 351 100%
______________________________________________________________________________________________________________________
Three months to 31 March 2006
Annual Single Total
APE % of
£m £m £m total
______________________________________________________________________________________________________________________
Independent financial advisers 65 1,565 222 70%
Tied 29 558 85 27%
Direct 4 64 10 3%
______________________________________________________________________________________________________________________
Total 98 2,187 317 100%
______________________________________________________________________________________________________________________
This information is provided by RNS
The company news service from the London Stock Exchange
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