New Business Results 1999
Legal & General Group PLC
14 January 2000
Legal & General Group Plc
1999 New Business Results
A record £16.5 billion invested with the Group in 1999
Funds under management reached £104 billion - up 25%
Worldwide EPI* £628m +27%
UK total EPI* £541m +24%
UK individual EPI* £442m +20%
UK corporate EPI* £99m +46%
International EPI* £87m +50%
New fund management business £13.1bn +16%
*Equivalent Premium Income (EPI) is total annual premiums + 10% of
single premiums and includes unit trust sales, for continuing
operations.
Group Chief Executive, David Prosser, said: 'This is another set of
record results showing the continuing strength and momentum of our
customer focused business. UK new business exceeded £500 million EPI
for the first time and sales have almost trebled since 1995 - a compound
growth rate of 29% per annum.
'Our fund management business won £13.1 billion in new funds - another
record. Funds under management have exceeded £100 billion for the first
time and have trebled over the last five years. This makes Legal &
General one of the fastest growing UK fund management businesses.
'Our strategy of good value products, provided to customers through the
distribution channel of their choice, continues to build market share
and gives a good return to shareholders. We are very well positioned
for the future.
The support of our many customers and business partners has enabled us
to achieve these remarkable results. With their continued support,
Legal & General faces the future with great confidence and high
expectations.'
UK business
===========
Retail
------
1999 saw further strong growth in new individual business, up 20% to
£442m EPI (1998: £368m). New business in the final quarter was £102m
EPI, an increase of 23% over the final quarter of 1998.
Life
Mortgage related business grew rapidly in 1999, as Legal & General built
upon its strength in the housing market, both through Business
Partnerships and by focusing on IFAs. As a consequence, life annual
premium sales grew by 37% to £126m (1998: £92m). Mortgage related annual
premiums include £20m of protection business and £46m of Flexible
Mortgage PEP/ISA sales. Single premium bond sales remained strong
throughout 1999, growing by 42% to £634m (1998: £446m), supported by the
launch of our new With-Profits Bond in August.
Pensions
Our continued success in the group personal pensions market has largely
offset the uncertainties created in the individual personal pensions
market, where sales have slowed ahead of the launch of Stakeholder
Pensions. New individual pension and annuity business, including group
personal pensions, increased to £142m EPI (1998: £138m). We believe
Legal & General is well positioned for the introduction of Stakeholder
Pensions in April 2001.
Unit trusts and PEPs/ISAs
Legal & General enjoyed a strong final PEP season and, although
investors' initial reaction to ISAs was one of caution, they have become
increasingly accepted. Single payment ISA sales in the second half of
1999 exceeded PEP sales over the equivalent period of 1998 by 18%.
This - together with increased institutional sales - produced a 16%
increase in single payment sales over the full year to £877m (1998:
£755m). Total PEP and ISA assets under management now exceed £2.5bn.
Banking
New mortgage advances grew by 83% to £271m, driven by our Flexible
Reserve product. Mortgage loans now total £868m. The launch of Legal &
General's 'Easy Access' LIBOR tracker deposit account in November has
generated an encouraging response from savers. By the year-end, Legal &
General Bank deposits exceeded £1.03bn (1998: £942m) on behalf of some
66,000 customers.
Distribution
Multi-channel distribution is a key component in Legal & General's
growth strategy. This maintains the greatest access to potential
customers and embraces our business partners, IFAs and direct sales to
customers through our call centre, the Internet and 'off the page'. Each
of these channels is making increasing use of e-commerce opportunities
to drive down costs and to enhance customer service. All channels have
achieved volume growth, but growth continues to be strongest in the IFA
channel, with individual new business growing by 31% over the prior year.
Corporate
UK corporate life and pensions new business in 1999 grew by 46% to £99m
EPI (1998: £68m). Strong growth in bulk purchase annuity business in
the first and final quarters of the year pushed single premiums up by
85% to £643m (1998: £348m). The group risk business achieved record
sales levels, with new annual premiums increasing by 20% to £24m (1998:
£20m).
Investment management
Our investment management business provides asset management expertise
to Legal & General's Retail and Corporate businesses, as well as to
trustees of pension schemes and other institutional clients. Total
assets under management exceeded £100bn at the year-end, of which over
60% are held for external clients. This underlines Legal & General's
position as a major UK investment house and as a leading provider of
index tracking services.
New funds under management rose 16% to £13.1bn, following the
exceptional result of £11.3bn achieved in 1998.
International life and pensions
New business from the Group's international operations grew strongly to
£87m EPI, an increase of 50%.
Our business in the USA had another excellent year and has established
itself as one of the major specialist writers of term assurance. Legal
& General America markets its products through a national brokerage
distribution to high net worth individuals. Its success is based upon
excellent underwriting capabilities and the efficiency of its low cost,
internet based operating environment. New business (which is almost
entirely annual premium business) increased by 77% to $101m EPI (1998:
$57m).
Continuing strong performance in the Netherlands saw sales grow by 20%
to Dfl 30m EPI (1998: Dfl 25m). Annual premiums grew particularly
strongly - up 29% to Dfl 18m, of which Dfl 7m (39%) represented sales
of the new flexible universal life product launched in April.
In France, there was a 12% increase in new business over the year to
Ffr 161m EPI (1998: Ffr 144m). New annual premiums - including group
protection business - increased 10% to Ffr 53m. Life single premiums
grew 22% to Ffr 754m, with a particularly strong performance in the
final quarter which benefited from the launch of a new unit linked fund.
For further information contact:
Investors: Peter Horsman Media: Graham Rimmer
Investor Relations Manager Chief Press Officer
0171 528 6362 0171 528 6252
Anthony Carlisle
Citigate Dewe Rogerson
0171 638 9571
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
YEAR ENDED 31 DECEMBER 1999
NEW UK BUSINESS
===============
Year ended Three months to
31 December 31 December
1999 1998 inc/ 1999 1998 inc/
(dec) (dec)
£m £m % £m £m %
RETAIL LIFE AND
PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 107 71 30 22
- Savings 2 2 0 1
- Protection 17 19 4 5
Pensions:
- Individual pensions 73 77 15 17
--- --- --- --- --- ---
Total new annual premiums 199 169 18 49 45 9
Single premiums
Life:
- With profits 448 274 106 76
- Other 186 172 36 50
Pensions:
- Individual pensions 260 272 39 61
- Annuities - individual 304 291 92 42
- DSS rebates 120 45 33 34
----- ----- --- --- --- ---
Total single premiums 1,318 1,054 25 306 263 16
Retail life
and pensions EPI 331 274 21 80 71 13
CORPORATE LIFE AND
PENSIONS BUSINESS
New annual premiums
- Group risk 24 20 6 4
- Group pensions 11 13 6 3
--- --- --- --- --- ---
Total new annual premiums 35 33 6 12 7 71
Single premiums
- Annuities -
bulk purchase 573 258 235 46
- Other group business 70 90 17 19
--- --- --- --- --- ---
Total single premiums 643 348 85 252 65 288
Corporate life --- --- --- --- --- ---
and pensions EPI 99 68 46 37 13 185
UNIT TRUSTS, PEPS AND ISAS
New annual premiums
- PEPs/ISAs
(excluding cash ISAs) 23 19 11 4
Single premiums
- Unit trusts 276 154 66 33
- PEPs/ISAs
(excluding cash ISAs) 601 601 46 47
--- --- --- --- --- ---
Unit trusts/PEPs/ISAs EPI 111 94 18 22 12 83
--- --- --- --- --- ---
Total UK EPI 541 436 24 139 96 45
=== === === === === ===
------ ------ --- ----- ----- ---
PENSION FUND MANAGEMENT 13,098 11,322 16 3,950 4,360 (9)
====== ====== === ===== ===== ===
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
YEAR ENDED 31 DECEMBER 1999
NEW BUSINESS FROM
CONTINUING OPERATIONS
=====================
Year ended Year ended
31 December 1999 31 December 1998
Annual Single Annual Single
£m £m £m £m
LIFE AND PENSIONS
Life 150 634 112 446
Pensions 84 1,327 90 956
--- ----- --- -----
UK 234 1,961 202 1,402
USA 63 1 34 5
Netherlands 5 35 4 38
France 5 71 5 66
--- ----- --- -----
INSURANCE TOTAL 307 2,068 245 1,511
RETAIL INVESTMENT BUSINESS
UK 23 877 19 755
France 31 36
--- ----- --- -----
TOTAL NEW BUSINESS 330 2,976 264 2,302
=== ===== === =====
OVERSEAS OPERATIONS
IN LOCAL CURRENCY
=================
Year ended
31 December inc/(dec)
1999 1998 %
USA ($m):
New annual premiums 101 56
Single premiums 1 8
EPI 101 57 77
Netherlands (D.Fl.m):
New annual premiums 18 14
Single premiums 125 117
EPI 30 25 20
France (F.Fr.m):
New annual premiums 53 48
Single premiums 754 618
Unit trusts 329 339
EPI 161 144 12
UK INDIVIDUAL EPI BY CHANNEL
============================
Year ended 31 December 1999
Annual Single (10%) Total EPI
£m £m £m %
Independent financial
advisers 107 144 251 57
Business partners 52 10 62 14
Financial consultancy 36 19 55 12
Direct 27 47 74 17
--- --- --- ---
Total 222 220 442 100
=== === === ===
Year ended 31 December 1998
Annual Single (10%) Total EPI
£m £m £m %
Independent financial
advisers 80 111 191 52
Business partners 45 7 52 14
Financial consultancy 40 15 55 15
Direct 23 48 71 19
--- --- --- ---
Total 188 181 369 100
=== === === ===
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