L&G New Business Results 2001

Legal & General Group PLC
24 January 2002




                      Legal & General Group Plc
                      2001 new business results
                            
                            
  -  Record new business
  -  Record new institutional fund management business
  -  Record funds under management despite equity market falls
                            
          
          
                                       Full year     Increase
New business APE*                                       
UK life and pensions                                    
   - individual                          £457m         +24%
   - group                               £127m         +74%
UK unit trusts and ISAs                  £126m         +34%
Total UK                                 £710m         +32%
International (inc. unit trusts)          £91m          -3%
Total APE including unit trusts/ISAs     £801m         +27%

                                                        
New institutional fund management      £13.2bn          +4%

* Annual Premium Equivalent (APE) is total new annual premiums + 10% of 
single premiums.



Group Chief Executive, David Prosser, said: '2001 has been a year of real 
progress for Legal & General with record new business volumes both for 
the year and for the fourth quarter.  Support from our strategic partners
helped UK individual new business grow by almost 50% in the fourth 
quarter.  Since 1995, UK individual new business has grown by 25% per 
annum compound, six successive years of growth in market share.

New institutional fund management business reached a record level at 
£13.2bn, a remarkable achievement.  Our market leading index fund skills 
were also the basis for unit trust and ISA growth, where our 34% increase 
in sales contrasts with a fall in sales for the total market over the 
year.

With our high quality brand and our extensive experience in multi-channel 
distribution, we believe Legal & General is well positioned to succeed in 
the new environment arising from the proposed changes to polarisation.'



UK new business
===============

New annual premium equivalent (APE) for the full year increased by 32% to 
£710m (2000: £536m), with the fourth quarter representing another record 
as new business grew to £194m APE (Q4 2000: £137m).  Individual business 
grew by 49% to £170m APE in the fourth quarter reflecting the benefit of
our strategic alliances.


Individual pensions
-------------------
New annual premium business grew by 60% to £123m (2000: £77m) of which 
£115m was written on Stakeholder terms.  Growth was particularly strong in 
the fourth quarter (up 144% to £39m).

Over 43,000 employers, covering 1.5m potential scheme members, have 
designated Legal & General as their Stakeholder pensions provider.  We 
believe this represents around 14% of total designations and places Legal 
& General in a strong position to meet our target market share.  We 
continue to support worksite marketing initiatives to encourage scheme 
membership.

In the final quarter, a growing proportion of our employer Stakeholder 
business came from fee based employee benefit consultants, generally 
covering larger employee groups and with higher average salaries.


Individual life
---------------
Legal & General has retained its leading position in the housing related 
market.  Annual premium sales of £138m were up 7% (2000: £129m) as the 
strong position we have built up in the life protection market has largely 
offset the impact of our decision to withdraw our ISA mortgage repayment 
product in May.  Despite this decision, annual premium life sales in the 
fourth quarter were £37m, 16% up on the corresponding quarter in the prior 
year.

Single premium bond sales were up sharply at £1,238m (2000: £751m), an 
increase of 65%, resulting from continuing high levels of demand, 
especially for with-profits bonds.  Reflecting falling equity values, we, 
in common with many competitors, have reduced with-profits bond product 
benefits and terms.  However, new business volumes have remained strong 
despite these changes.


Group business
--------------
Group new business increased by 74% to reach £127m APE (2000: £73m), 
largely as a result of our strength in the bulk purchase annuity market.  
Following subdued demand in 2000, bulk purchase annuity premiums increased 
by 187% to £741m.  In the latter part of 2001, we took the opportunity to 
increase the assumed return on capital in pricing this business.  However, 
at the smaller end of the market we continued to write increased volumes.


Unit trusts and ISAs
--------------------
Against a sharp downturn in sales in the market as a whole, we have 
achieved exceptionally strong growth in new business in 2001.  That growth 
reflected customers' recognition of the benefits of regular saving and the
certainty of outcome relative to markets provided by our indexed products.

Over the year, new business APE reached £126m, an increase of 34% (2000: 
£94m).  In the fourth quarter new business increased 52% to £38m APE 
boosted by the success of our Protected Portfolio product.

This month we have announced a further tranche of our Protected Portfolio 
product and the launch of our web-enabled funds supermarket.  Legal & 
General's funds supermarket will initially offer over 80 funds from 21
different fund managers.



Institutional fund management
=============================

Our institutional fund management subsidiary had a record year for new 
business in 2001 despite the fall in equity values which occurred during 
the year.  We continue to expand our range of funds, in part to meet the 
growing appetite from defined benefit schemes for investment in corporate 
bonds.  Our broad range of indexed funds has also reinforced our position 
as a leading provider of investment services to defined contribution 
schemes.

Our success in winning both equity and bond mandates for our range of 
active and indexed funds brought new business of £13.2bn (2000: £12.7bn).  
Another 231 pension funds were added to our client list over the year with
some of the largest mandates coming from the local authority sector.  
Since January 1998, we have averaged over £1bn of new UK pension fund 
investment business a month - a track record we believe to be unequalled 
by any other fund management house.

Although equity values fell over the year, Group funds under management 
exceeded £116bn (2000: £114bn) at the year end.



International business
======================

Our European businesses continued to show strong growth over the year, up 
21% to EUR. 63m APE (2000: EUR. 52m).  Sales in the Netherlands continued 
to outperform the wider market, growing by an impressive 40% to EUR. 28m 
APE (2000: EUR. 20m).  In France, against difficult market conditions, 
new business has increased by 9% to EUR. 35m APE (2000: EUR. 32m),
supported by strong growth in annual premium business which increased 38% 
to EUR. 11m.

In the USA, new annual premium business fell to $76m (2000: $93m) 
following exceptional results in the first part of 2000 when sales were 
distorted by the impact of the introduction of the 'Triple X' solvency 
requirements.  From a lower base, volumes have grown throughout 2001 with 
fourth quarter new business 24% ahead of the corresponding period in 2000.  
We continued to develop the business and believe we have increased our 
share in the niche market of term assurance for upper income customers.



UK Distribution
===============

We have achieved volume growth in our IFA and Business Partners 
distribution channels and distribution mix has become more balanced as the 
fourth quarter results benefited from the strategic alliances with both 
Alliance & Leicester and Barclays, together with the record number of 
smaller business partners recruited.

In the IFA sector, we established a separate sales and servicing team in 
December focussed on the needs of the major employee benefit consultants 
and other fee based advisors to reflect the increasing volumes of business 
we are receiving from this important segment of the market.

We have also used our direct distribution capabilities to support the 
marketing efforts of our major Business Partners.  Our e-commerce 
capabilities have expanded further.  We have benefited from our facility 
for customers to purchase and manage ISAs on line with 12% of Direct ISA 
sales over the year via the internet.  Additional e-commerce functionality 
provided for our Direct customers is also utilised by our Business 
Partners or in the IFA channel.  The volumes of term business submitted 
and underwritten through the internet have continued to grow and now 
represent over a quarter of such business submitted by IFAs.



Outlook
=======

2002 will see the full year benefit of the new partnerships, both large 
and small, which were established in 2001.  Accordingly, we anticipate
achieving further market share growth during the year ahead.

In the longer term, our marketplace will be influenced by the changes to 
the polarisation rules recently proposed by the FSA.  Legal & General has 
successfully managed a multi-channel distribution strategy for many years.  
This represents both a core competence and a key differentiator for us.  
With our broad product range, recognised quality proposition, triple A 
financial rating and well-known brand, we believe we have the combination
of capabilities and skills to succeed as distribution develops in the 
marketplace for financial services.



For further information contact:


Investors: Peter Horsman                 Media: John Morgan
           Head of Investor Relations    Head of Public Relations
           020 7528 6362                 01737 375353


                                         Anthony Carlisle
                                         Citigate Dewe Rogerson
                                         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 for 2001:
     28 February    Preliminary Results for 2001
     30 April       AGM and first quarter new business
     25 July        Interim results and second quarter new business
     18 October     Third quarter new business.

3. David Prosser, Group Chief Executive will be available for a 
conference call for wire services at 7.45am today.  Callers should dial 
020 8400 6314 and ask for the Legal & General conference quoting John 
Morgan as Chairperson.








LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
YEAR ENDED 31 DECEMBER 2001

NEW UK BUSINESS
===============

                             Year ended              Three months to
                             31 December   inc/        31 December   inc/
                            2001     2000  (dec)      2001     2000  (dec)
                             £m       £m     %         £m       £m     %
INDIVIDUAL LIFE AND
PENSIONS BUSINESS

New annual premiums
Life:
 - Mortgage related          101      112               26       26
 - Savings                     0        1                0        0
 - Protection                 37       16               11        6
Pensions:
 - Individual pensions       123       77               39       16
                          ------   ------   ---     ------   ------   ---
Total new annual premiums    261      206    27         76       48    58

Single premiums
Life:
 - With-profits            1,134      648              360      180
 - Other                     104      103               35       21
Pensions:
 - Individual pensions       266      342               55       55
 - Annuities - individual    335      426               80      116
 - DSS rebates               120      111               32       35
                          ------   ------   ---     ------   ------   ---
Total single premiums      1,959    1,630    20        562      407    38

Individual life           ------   ------   ---     ------   ------   ---
and pensions APE             457      369    24        132       89    48



GROUP LIFE AND
PENSIONS BUSINESS

New annual premiums
 - Group risk                 32       31                7        6
 - Group pensions             14        9                2        2
                          ------   ------   ---     ------   ------   ---
Total new annual premiums     46       40    15          9        8    13

Single premiums
 - Annuities - bulk 
     purchase                741      258              143      136
 - Other group business       74       68                5       10
                          ------   ------   ---     ------   ------   ---
Total single premiums        815      326   150        148      146     1

Group life                ------   ------   ---     ------   ------   ---
and pensions APE             127       73    74         24       23     4



ISAS, PEPS AND UNIT TRUSTS

New annual premiums
 - ISAs/PEPs
     (excluding cash ISAs)    38       27               13       13
 - Unit trusts                 1        0                1        0
                          ------   ------   ---     ------   ------   ---
Total new annual premiums     39       27    44         14       13     8

Single premiums
 - ISAs/PEPs
     (excluding cash ISAs)   467      403               98       58
 - Unit trusts               405      269              145       62
                          ------   ------   ---     ------   ------   ---
Total single premiums        872      672    30        243      120   103

ISAs, PEPs and            ------   ------   ---     ------   ------   ---
unit trusts APE              126       94    34         38       25    52

                          ------   ------   ---     ------   ------   ---
Total UK APE                 710      536    32        194      137    42
                          ======   ======   ===     ======   ======   ===  



INSTITUTIONAL
FUND MANAGEMENT

UK Managed Funds
 - Pooled funds           10,608   11,040            2,842    3,007
 - Segregated funds        2,571      327            1,373       32
                          ------   ------           ------   ------
                          13,179   11,367            4,215    3,039
UK Other                      40    1,310               12       39
                          ------   ------   ---     ------   ------   ---
                          13,219   12,677     4      4,227    3,078    37
                          ======   ======   ===     ======   ======   ===




LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
YEAR ENDED 31 DECEMBER 2001

WORLDWIDE NEW BUSINESS
======================

                             Year ended              Three months to
                             31 December   inc/        31 December   inc/
                            2001     2000  (dec)      2001     2000  (dec)
                             £m       £m     %         £m       £m     %
New annual premiums
Life and pensions:
 - Life                      170      160               44       38
 - Pensions                  137       86               41       18
                          ------   ------   ---     ------   ------   ---  
UK                           307      246    25         85       56    52
 - USA                        52       62               14       10
 - Netherlands                 8        7                2        3
 - France                      7        5                1        1
                          ------   ------   ---     ------   ------   ---
Total life and pensions      374      320    17        102       70    46

Retail investment business:
 - UK                         39       27               14       13
                          ------   ------   ---     ------   ------   ---
Total new annual premiums    413      347    19        116       83    40


Single premiums
Life and pensions:
 - Life                    1,238      751              395      201 
 - Pensions                1,536    1,205              315      352
                          ------   ------   ---     ------   ------   ---
UK                         2,774    1,956    42        710      553    28
 - USA                         1        1                1        1
 - Netherlands                91       54               14       24
 - France                    109      107               25       29
                          ------   ------   ---     ------   ------   ---
Total life and pensions    2,975    2,118    40        750      607    24

Retail investment business:
 - UK                        872      672              243      120
 - France                     35       41                6       14
                          ------   ------   ---     ------   ------   ---
Total single premiums      3,882    2,831    37        999      741    35


Annual premium equivalent (APE)
 - Life and pensions 
     business                671      532    26        177      131    35
 - Retail investment 
     business                130       98    33         39       26    50
                          ------   ------   ---     ------   ------   ---  
Worldwide APE                801      630    27        216      157    37
                          ======   ======   ===     ======   ======   ===




LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
YEAR ENDED 31 DECEMBER 2001

OVERSEAS OPERATIONS IN LOCAL CURRENCY
=====================================

                             Year ended    inc/      Three months to inc/
                             31 December   (dec)       31 December   (dec)
                            2001     2000    %        2001     2000    %
USA ($m):
New annual premiums           76       93               21       17
Single premiums                1        1                0        0

APE                           76       93   (18)        21       17    24


Netherlands (EUR. m):
New annual premiums           13       11                3        3
Single premiums              149       86               24       36

APE                           28       20    40          6        7   (14)


France (EUR. m):
New annual premiums           11        8                1        2
Single premiums              178      170               43       40
Unit trusts                   58       65               12       19

APE                           35       32     9          7        8   (13)




UK INDIVIDUAL APE BY CHANNEL
============================

                                    Year ended 31 December 2001
                                 Annual   Single       Total APE
                                   £m       £m        £m        %

Independent financial adviser      154      159       313       54
Business partnerships              115       95       210       36
Direct                              31       29        60       10
                                ------   ------    ------     ----
                                   300      283       583      100
                                ======   ======    ======     ====  


                                    Year ended 31 December 2000
                                 Annual   Single       Total APE
                                   £m       £m        £m        %

Independent financial adviser      123      156       279       60
Business partnerships               78       31       109       24
Direct                              32       43        75       16
                                ------   ------    ------     ----           
                                   233      230       463      100
                                ======   ======    ======     ====




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