3rd Quarter Results

Legal & General Group PLC 14 October 2004 14 October 2004 Legal & General Group Plc ========================= New business results to 30 September 2004 ========================================= • Strong growth in UK individual life and pensions • Worldwide new business up 12% • Group funds under management reach £154bn New business APE (Note 1) Nine months Change Three months Change to 30/9/04 to 30/9/04 UK individual business - life and pensions £444m +23% £167m +27% - retail investments £145m -14% £30m -35% - total £589m +11% £197m +11% UK group life and pensions £85m +9% £24m -8% UK total £674m +11% £221m +9% International £85m +20% £27m +17% Worldwide total £759m +12% £248m +10% Institutional fund management £11.1bn £2.4bn Note 1 Annual Premium Equivalent (APE) is total new annual premiums + 10% of single premiums including ISAs and unit trusts. David Prosser, Group Chief Executive, said: 'Legal & General is continuing its record of new business success with double digit growth both year to date and against the corresponding quarter last year. Within this overall good growth, demand by individual investors for unit linked products has been strong. This has yet to be seen in ISAs and unit trusts where we believe further equity market recovery is needed to revive retail investor interest. Legal & General Investment Management has continued its impressive record of new business success and has passed two milestones. Total assets under management are now over £154bn, and over £100bn is for external clients. The business has reinforced its position as one of Europe's major fund management houses. Our value for money and financial strength are key brand attributes, which we are confident will continue to win us new distribution and increased market share. We anticipate achieving further profitable growth.' UK new business =============== In the third quarter we maintained the positive progress of the second quarter, with Legal & General once again achieving encouraging new business growth. We experienced particularly strong growth in IFA sourced single premium life and pensions new business. Success in these markets is the result of our strategy of building a more significant position in the IFA market place. Unit linked bonds proved very popular with retail investors at the expense of with-profits bonds and ISAs and unit trusts, where demand appeared weak across the market during the quarter. Total UK life and pensions new business was up 22% on the corresponding quarter last year and up 20% over the year to date. We believe that growth at these levels demonstrates our continued ability to win market share in the UK. In the second quarter we estimate that our UK retail market share (including ISAs and unit trusts) exceeded 10% for the first time. Individual life --------------- In the third quarter, annual premium sales were broadly stable at £42m (2003: £43m). New annual premiums for the first nine months increased 5% to £120m (2003: £114m) as we maintained our market leading position in the life protection market. Demand for unit linked bonds continued to grow strongly, more than offsetting the decline in sales of with-profit bonds. In aggregate, third quarter single premiums were £445m (2003: £275m), a 62% increase. Over the first nine months sales were 60% higher at £1,266m (2003: £789m). Individual pensions ------------------- Third quarter new annual premium business maintained the momentum of the second quarter with sales of £32m (2003: £24m). We continue to focus on acquiring employer-related schemes where there is a matching contribution from the employer. New annual premium business over the first nine months amounted to £93m (2003: £81m). In single premium business, our pensions transfer proposition has continued to attract strong business volumes. Our active pricing policy for individual annuities has enabled us to control margins while contributing to 33% growth in total single premium pension business in the third quarter to £480m (2003: £360m) and 19% growth to £1,042m (2003: £876m) for the first nine months of the year. ISAs and unit trusts -------------------- Our sales have reflected the wider market weakness. Regular payment sales in the third quarter were £4m (2003: £8m). Single payment sales in the third quarter were also lower at £260m (2003: £386m), which includes sales to institutional clients of £106m (2003: £61m). For the nine-month period sales were 14% lower at £145m APE (2003: £168m). Group business -------------- After an exceptional second quarter, in which we benefited from a competitor's withdrawal from the group risk market, annual premiums in the third quarter were unchanged from the corresponding period last year at £11m but declined from the levels of the first and second quarters. Bulk purchase annuity single premiums at £120m in the third quarter were below both the second quarter (£139m) and the corresponding quarter last year (£149m). In the first nine months group new business totalled £85m APE (2003: £78m). Institutional fund management ============================= Legal & General Investment Management continued to win significant volumes of new business in the quarter and in so doing has passed two important milestones. Assets managed for external clients now exceed £100bn and total assets under management now exceed £154bn. New business of £11.1bn in the first nine months of the year (2003: £10.1bn) maintained our record of averaging over £1bn of new UK pension fund investment business per month since January 1998. We have continued to widen the sources of index fund business with new clients in the Netherlands and the Irish republic and to broaden the product range with notable success in active bond mandates. International business ====================== In sterling terms, third quarter new business (including unit trusts) grew 17% to £27m APE (2003: £23m) bringing new business for the nine month period to £85m APE (2003: £71m). In local currency terms, new business in the USA in the third quarter grew to $26m APE (2003: $20m). Our European businesses produced €19m APE in the third quarter (2003: €15m) with growth in most business areas. Outlook ======= Major opportunities continue to emerge for well positioned companies, such as Legal & General, from the many changes occurring in the UK insurance industry. The introduction of the regulation of mortgage advice next month has provided an opportunity, through Legal & General Partnership Services Ltd, to further develop our market leading mortgage related distribution by establishing a network of tied mortgage advisers. In pension provision, the simplification of the tax regime and the proposals which will emerge following the report of the Turner Commission will, we believe, expand the market. We expect the strong growth we have recently experienced in the IFA sector to stand us in good stead once depolarisation finally occurs. With our brand, distribution and financial strength, we believe we continue to be well positioned to take advantage of our changing market place. For further information contact: Investors: Peter Horsman Media: John Morgan Head of Investor Relations Head of Public Relations 020 7528 6362 020 7528 6213 Anthony Carlisle Citigate Dewe Rogerson 020 7638 9571 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: 2004 Full year new business results 26 January 2005 2004 Preliminary results 24 February 2005 2005 First quarter new business results and AGM 27 April 2005 2005 Interim results and second quarter new business 28 July 2005 2005 Third quarter new business results 20 October 2005 LEGAL & GENERAL GROUP PLC UNAUDITED NEW BUSINESS PREMIUMS NINE MONTHS TO 30 SEPTEMBER 2004 NEW UK BUSINESS Nine months to Three months to =============== 30 September increase/ 30 September increase/ 2004 2003 (decrease) 2004 2003 (decrease) £m £m % £m £m % INDIVIDUAL LIFE AND PENSIONS BUSINESS New annual premiums Life: - Mortgage related 82 78 29 30 - Protection 38 36 13 13 Pensions: - Individual pensions 93 81 32 24 ------ ------ ------ ------ ------ ------ Total new annual premiums 213 195 9 74 67 10 Single premiums Life: - With-profits 310 450 86 122 - Other 956 339 359 153 Pensions: - Individual pensions 302 217 124 52 - Annuities - individual 647 525 280 211 - DSS rebates 93 134 76 97 ------ ------ ------ ------ ------ ------ Total single premiums 2,308 1,665 39 925 635 46 Individual life and ------ ------ ------ ------ ------ ------ pensions APE 444 362 23 167 131 27 ====== ====== ====== ====== ====== ====== Nine months to Three months to 30 September increase/ 30 September increase/ 2004 2003 (decrease) 2004 2003 (decrease) £m £m % £m £m % ISAS, PEPS AND UNIT TRUSTS New annual premiums - ISAs/PEPs (excluding cash ISAs) 17 22 4 7 - Unit trusts 1 5 0 1 ------ ------ ------ ------ ------ ------ Total new annual premiums 18 27 (33) 4 8 (50) Single premiums - ISAs/PEPs (excluding cash ISAs) 437 496 48 104 - Unit trusts 833 914 212 282 ------ ------ ------ ------ ------ ------ Total single s 1,270 1,410 (10) 260 386 (33) ISAs, PEPs and unit ------ ------ ------ ------ ------ ------ trusts 145 168 (14) 30 46 (35) ====== ====== ====== ====== ====== ====== Total individual ------ ------ ------ ------ ------ ------ business APE 589 530 11 197 177 11 ====== ====== ====== ====== ====== ====== Nine months to Three months to 30 September increase/ 30 September increase/ 2004 2003 (decrease) 2004 2003 (decrease) £m £m % £m £m % GROUP LIFE AND PENSIONS BUSINESS New annual premiums - Group risk 47 24 11 11 - Group pensions 3 2 1 0 ------ ------ ------ ------ ------ ------ Total new annual premiums 50 26 92 12 11 9 Single premiums - Annuities - bulk purchase 350 515 120 149 - Other group business 4 9 2 5 ------ ------ ------ ------ ------ ------ Total single premiums 354 524 (32) 122 154 (21) Group life and ------ ------ ------ ------ ------ ------ pensions APE 85 78 9 24 26 (8) ------ ------ ------ ------ ------ ------ Total UK APE 674 608 11 221 203 9 ====== ====== ====== ====== ====== ====== INSTITUTIONAL FUND MANAGEMENT UK Managed Funds - Pooled funds 9,699 8,327 2,089 3,120 - Segregated funds 1,143 1,256 80 897 ------ ------ ------ ------ 10,842 9,583 2,169 4,017 UK Other 301 470 231 56 ------ ------ ------ ------ ------ ------ 11,143 10,053 11 2,400 4,073 (41) ====== ====== ====== ====== ====== ====== LEGAL & GENERAL GROUP PLC UNAUDITED NEW BUSINESS PREMIUMS NINE MONTHS TO 30 SEPTEMBER 2004 WORLDWIDE NEW BUSINESS ====================== Nine months to Three months to 30 September increase/ 30 September increase/ 2004 2003 (decrease) 2004 2003 (decrease) £m £m % £m £m % Annual premiums Life and pensions: - Life 167 138 53 54 - Pensions 96 83 33 24 ------ ------ ------ ------ ------ ------ UK 263 221 19 86 78 10 - USA 41 39 14 12 - Netherlands 10 8 4 2 - France 13 6 3 2 ------ ------ ------ ------ ------ ------ Total life and pensions 327 274 19 107 94 14 Retail investment business: - UK 18 27 4 8 ------ ------ ------ ------ ------ ------ Total new annual premiums 345 301 15 111 102 9 Single premiums Life and pensions: - Life 1,266 789 445 275 - Pensions 1,396 1,400 602 514 ------ ------ ------ ------ ------ ------ UK 2,662 2,189 22 1,047 789 33 - USA 1 11 0 3 - Netherlands 91 67 27 21 - France 106 85 38 36 ------ ------ ------ ------ ------ ------ Total life and pensions 2,860 2,352 22 1,112 849 31 Retail investment business: - UK 1,270 1,410 260 386 - France 14 18 6 9 ------ ------ ------ ------ ------ ------ Total single premiums 4,144 3,780 10 1,378 1,244 11 Annual premium equivalent (APE) - UK life and pensions business 529 440 191 157 - Overseas life and pensions business 84 69 27 22 ------ ------ ------ ------ ------ ------ Total life and pensions business 613 509 20 218 179 22 - UK retail investment business 145 168 30 46 - Overseas retail investment business 1 2 0 1 ------ ------ ------ ------ ------ ------ Total retail investment business 146 170 (14) 30 47 (36) ------ ------ ------ ------ ------ ------ Worldwide APE 759 679 12 248 226 10 ====== ====== ====== ====== ====== ====== LEGAL & GENERAL GROUP PLC UNAUDITED NEW BUSINESS PREMIUMS NINE MONTHS TO 30 SEPTEMBER 2004 OVERSEAS OPERATIONS IN LOCAL CURRENCY ===================================== Nine months to increase/ Three months to increase/ 30 September (decrease) 30 September (decrease) 2004 2003 % 2004 2003 % USA ($m): New annual premiums 74 64 26 19 Single premiums 1 18 0 5 APE 74 66 12 26 20 30 Netherlands (€m): New annual premiums 14 12 5 4 Single premiums 132 96 37 29 APE 27 21 29 9 6 50 France (€m): New annual premiums 18 9 4 3 Single premiums 155 121 54 50 Unit trusts 21 26 8 12 APE 36 24 50 10 9 11 UK INDIVIDUAL APE BY CHANNEL ============================ Nine months to 30 September 2004 Annual Single Total APE £m £m £m % Independent financial advisers 126 242 368 62 Business partnerships 88 87 175 30 Business partnerships direct 3 14 17 3 Direct 14 15 29 5 ------ ------ ------ ------ 231 358 589 100 ====== ====== ====== ====== Nine months to 30 September 2003 Annual Single Total APE £m £m £m % Independent financial advisers 106 177 283 53 Business partnerships 92 100 192 36 Business partnerships direct 9 16 25 5 Direct 15 15 30 6 ------ ------ ------ ------ 222 308 530 100 ====== ====== ====== ====== This information is provided by RNS The company news service from the London Stock Exchange

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