L&G New Business Results - Q3
Legal & General Group PLC
11 October 2002
11 October 2002
Legal & General Group Plc
=========================
New business results to 30 September 2002
=========================================
Nine months Nine months Change
to 30/9/02 to 30/9/01
New business APE (Note 1)
UK total £635m £516m +23%
- UK individual business £580m £413m +40%
International £73m £69m +6%
Total £708m £585m +21%
New institutional fund management £10.2bn £9.0bn +13%
Note 1 - Annual Premium Equivalent (APE) is total new annual premiums + 10% of
single premiums.
David Prosser, Group Chief Executive, said: 'This is another set of good
results, which will continue Legal & General's consistent growth record.
The scale of our UK new business has been much expanded by the strength of our
new partnerships, as demonstrated by the 40% growth in individual business in
the first nine months of the year. The growth of 12% in UK individual business
in the third quarter represents a robust performance despite difficult market
conditions, which we believe will contrast favourably with the industry
performance over this period.
Our institutional fund management business has won over £10 billion of new
business already this year, continuing its record of averaging over £1 billion
new business a month since the beginning of 1998.
With the benefit of the additional capital raised in our Rights Issue, I believe
we are very well positioned to take advantage of the opportunities we see.'
UK new business
===============
New business for the first nine months of the year increased by 23% to £635m APE
(2001: £516m). Within this result, individual business grew by 40% to £580m APE
(2001: £413m), as the impact of new partnerships continued to benefit our sales
performance. In the third quarter, individual new business volumes grew 12% to
£170m APE, in line with the growth for the first two months of the quarter
indicated at the time of the announcement of our Rights Issue. The comparator
for this quarter includes the early results from the strategic partnership with
Barclays, which became fully operational in the third quarter of 2001. Group
business at £17m APE in the third quarter (2001: £39m) continued to reflect
lower levels of bulk purchase annuity business.
Individual life
---------------
Annual premium sales for the first nine months increased by 6% to £107m (2001:
£101m), as the strong position we have built in the life protection market has
more than offset the impact of our decision to withdraw our ISA mortgage
repayment product in May last year. In the third quarter, annual premium sales
increased from £34m to £36m.
Demand for single premium bonds benefited from our new distribution partnerships
with sales up by 27% to £1,069m in the first nine months (2001: £843m). However,
as indicated at the half-year, recent equity market conditions have dampened
demand and have constrained third quarter sales to £293m (2001: £344m).
Individual pensions
-------------------
Over the first nine months new annual premium business continued to grow
strongly, up 57% to £132m (2001: £84m) reflecting our success in winning
business from fee-based employee benefit consultants. Third quarter new annual
premium business grew from £34m to £39m.
Single premium business grew 12% in the first nine months to £623m (2001: £554m)
largely as a consequence of increased compulsory purchase annuity sales and a
higher level of DSS rebates. Third quarter growth was even stronger, up 22% to
£246m.
ISAs and unit trusts
--------------------
Against a downturn in total market sales, we have continued to achieve very
strong growth in new business, benefiting from the support of our strategic
partners.
Regular payment business in the first nine months grew 68% to £42m (2001: £25m).
Single payment sales reached £1,299m, an increase of 107% (2001: £629m). In the
third quarter, single payment sales increased by 48% from £199m in 2001 to £294m
despite weak equity markets.
Group business
--------------
Group new business was £55m APE in the first nine months (2001: £103m). These
lower volumes reflected reduced levels of demand in the bulk purchase annuity
market arising from the adverse impact of equity markets on pension scheme
funding levels. We have continued to win encouraging volumes of bulk purchase
business in the small and mid-sized segment. In the third quarter we focussed on
maintaining volumes in this segment of the market at the expense of larger
schemes.
Institutional fund management
=============================
Our institutional fund management subsidiary maintained its highly successful
track record by winning new business for the first nine months of the year of
£10.2bn (2001: £9.0bn).
Third quarter new business, unchanged at £3.0bn, has maintained our record of
averaging over £1bn of new UK pension fund investment business per month since
January 1998.
International business
======================
In the USA, new business increased by 24% to $68m APE (2001: $55m) in the first
nine months as we have continued to develop our chosen niche market of term
assurance for upper income customers. Third quarter new business grew even more
strongly by 32% to $25m APE (2001: $19m).
Our European businesses produced EUR. 47m APE in the first nine months (2001:
EUR. 50m). In the Netherlands, annual premium business at EUR. 13m (2001: EUR.
10m) showed steady growth with a particularly strong contribution from term
assurance. However, single premium business volumes were lower following an
exceptional result in the first quarter last year.
In France, where market conditions have been difficult, new business including
unit trusts in the first nine months was EUR. 24m APE (2001: EUR. 28m) as
investors favoured guaranteed products rather than the equity based products
which we offer. Despite these market pressures, third quarter volumes grew from
EUR. 6m to EUR. 8m.
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:
2002 full year new business results 23 January 2003
2002 preliminary results 27 February 2003
2003 first quarter new business results and AGM 30 April 2003
2003 interim results and second quarter new business 24 July 2003
2003 third quarter new business results 15 October 2003
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
NINE MONTHS TO 30 SEPTEMBER 2002
--------------------------------
NEW UK BUSINESS
===============
Nine months to Three months to
30 September increase/ 30 September increase/
2002 2001 (decrease) 2002 2001 (decrease)
£m £m % £m £m %
INDIVIDUAL LIFE AND PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 73 75 24 24
- Protection 34 26 12 10
Pensions:
- Individual pensions 132 84 39 34
------ ------ ------ ------ ------ ------
Total new annual premiums 239 185 29 75 68 10
Single premiums
Life:
- With-profits 886 774 221 315
- Other 183 69 72 30
Pensions:
- Individual pensions 214 211 65 53
- Annuities - individual 300 255 115 95
- DSS rebates 109 88 66 53
------ ------ ------ ------ ------ ------
Total single premiums 1,692 1,397 21 539 546 (1)
------ ------ ------ ------ ------ ------
Individual life and pensions APE 408 325 26 129 123 5
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs
(excluding cash ISAs) 37 25 48 11 9 22
- Unit trusts 5 0 0 0
------ ------ ------ ------
Total new annual premiums 42 25 68 11 9 22
Single premiums
- ISAs/PEPs
(excluding cash ISAs) 646 369 110 59
- Unit trusts 653 260 184 140
------ ------ ------ ------ ------ ------
Total single premiums 1,299 629 107 294 199 48
------ ------ ------ ------ ------ ------
ISAs, PEPs and unit trusts APE 172 88 95 41 29 41
------ ------ ------ ------ ------ ------
Total Individual Business APE 580 413 40 170 152 12
------ ------ ------ ------ ------ ------
GROUP LIFE AND PENSIONS BUSINESS
New annual premiums
- Group risk 24 25 9 9
- Group pensions 5 12 2 8
------ ------ ------ ------ ------ ------
Total new annual premiums 29 37 (22) 11 17 (35)
Single premiums
- Annuities - bulk purchase 210 598 35 201
- Other group business 52 69 24 32
------ ------ ------ ------ ------ ------
Total single premiums 262 667 (61) 59 233 (75)
------ ------ ------ ------ ------ ------
Group life and pensions APE 55 103 (47) 17 39 (56)
------ ------ ------ ------ ------ ------
Total UK APE 635 516 23 187 191 (2)
====== ====== ====== ====== ====== ======
INSTITUTIONAL FUND MANAGEMENT
UK Managed Funds
- Pooled funds 9,172 7,766 2,847 2,169
- Segregated funds 489 1,198 12 796
------ ------ ------ ------
9,661 8,964 2,859 2,965
UK Other 542 28 127 15
------ ------ ------ ------ ------ ------
10,203 8,992 13 2,986 2,980 0
====== ====== ====== ====== ====== ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
NINE MONTHS TO 30 SEPTEMBER 2002
--------------------------------
WORLDWIDE NEW BUSINESS
======================
Nine months to Three months to
30 September increase/ 30 September increase/
2002 2001 (decrease) 2002 2001 (decrease)
£m £m % £m £m %
New annual premiums
Life and pensions:
- Life 131 126 45 43
- Pensions 137 96 41 42
------ ------ ------ ------ ------ ------
UK 268 222 21 86 85 1
- USA 43 38 14 12
- Netherlands 8 6 3 2
- France 4 6 1 1
------ ------ ------ ------ ------ ------
Total life and pensions 323 272 19 104 100 4
Retail investment business:
- UK 42 25 11 9
------ ------ ------ ------ ------ ------
Total new annual premiums 365 297 23 115 109 6
Single premiums
Life and pensions:
- Life 1,069 843 293 345
- Pensions 885 1,221 305 434
------ ------ ------ ------ ------ ------
UK 1,954 2,064 (5) 598 779 (23)
- USA 2 0 1 0
- Netherlands 67 77 14 15
- France 83 84 30 29
------ ------ ------ ------ ------ ------
Total life and pensions 2,106 2,225 (5) 643 823 (22)
Retail investment business:
- UK 1,299 629 294 199
- France 23 29 7 7
------ ------ ------ ------ ------ ------
Total single premiums 3,428 2,883 19 944 1,029 (8)
Equivalent premium income (APE)
- Life and pensions business 534 494 8 169 182 (7)
- Retail investment business 174 91 91 41 30 37
------ ------ ------ ------ ------ ------
Worldwide APE 708 585 21 210 212 (1)
====== ====== ====== ====== ====== ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
NINE MONTHS TO 30 SEPTEMBER 2002
--------------------------------
OVERSEAS OPERATIONS IN LOCAL CURRENCY
=====================================
Nine months to increase/ Three months to increase/
30 September (decrease) 30 September (decrease)
2002 2001 % 2002 2001 %
USA ($m):
New annual premiums 68 55 25 19
Single premiums 3 1 2 0
APE 68 55 24 25 19 32
Netherlands (EUR. m):
New annual premiums 13 10 5 4
Single premiums 106 125 24 22
APE 23 22 5 7 6 17
France (EUR. m):
New annual premiums 7 10 2 1
Single premiums 133 135 52 44
Unit trusts 36 46 12 9
APE 24 28 (14) 8 6 33
UK INDIVIDUAL APE BY CHANNEL
============================
Nine months to 30 September 2002 Annual Single Total APE
£m £m £m %
Independent financial advisers 125 137 262 45
Business partnerships 116 117 233 40
Business partnerships direct 20 20 40 7
Direct 20 25 45 8
------ ------ ------ ------
281 299 580 100
====== ====== ====== ======
Nine months to 30 September 2001 Annual Single Total APE
£m £m £m %
Independent financial advisers 114 123 237 57
Business partnerships 70 54 124 30
Business partnerships direct 2 1 3 1
Direct 23 25 48 12
------ ------ ------ ------
209 203 412 100
====== ====== ====== ======
Three months to 30 September 2002 Annual Single Total APE
£m £m £m %
Independent financial advisers 41 41 82 48
Business partnerships 36 33 69 41
Business partnerships direct 6 5 11 6
Direct 4 4 8 5
------ ------ ------ ------
87 83 170 100
====== ====== ====== ======
Three months to 30 September 2001 Annual Single Total APE
£m £m £m %
Independent financial advisers 40 42 82 54
Business partnerships 29 30 59 39
Business partnerships direct 2 1 3 2
Direct 5 2 7 5
------ ------ ------ ------
76 75 151 100
====== ====== ====== ======
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