L&G Q1 New Business Results

Legal & General Group PLC 26 April 2006 LEGAL & GENERAL GROUP PLC NEW BUSINESS RESULTS FOR THE 3 MONTHS TO 31 MARCH 2006 Stock Exchange Release 26 April 2006 Continued momentum - strong market environment • Strong UK market growth • Legal & General outperforms again o UK new business up 28% to £363m APE o Worldwide new business up 27% to £390m APE • £5.6bn new institutional funds under management Group Chief Executive, Tim Breedon, said: 'Legal & General Group's first quarter 2006 new business results show continued new business momentum, reflecting the strength of the protection, savings and investment markets in the UK and of our position within them. In particular, our partnership with Cofunds, the investment fund platform, and our many long-standing Bank and Building Society relationships, are playing an important role in driving our business forward. UK new business was up 28% in the first quarter of this year. We saw good performance in retail protection sales as the housing market showed further signs of recovery. There was increased activity in the retail pensions market, with customers and advisers preparing for changes in pensions legislation. Our investment bond business rose 39% with intermediaries taking advantage of the opportunities available to them and to their customers through wrap platforms and our newly launched multi-fund Portfolio Bond. In retail investments, ISA and unit trust sales saw impressive growth, as consumers drew confidence from improved equity markets. Legal & General Investment Management delivered £5.6bn of new funds under management - yet another quarter of outstanding performance. This is a strong start to the year. We remain confident in our ability to continue delivering profitable growth.' New business APE(1) (£m) Q1 2006 Q1 2005 % change _______________________________________________________________________________________________ UK life and pensions 239 208 15 International life and pensions 27 24 13 _______________________________________________________________________________________________ Total life and pensions 266 232 15 _______________________________________________________________________________________________ UK retail investments 124 75 65 _______________________________________________________________________________________________ Worldwide total 390 307 27 _______________________________________________________________________________________________ Investment management £5.6bn £3.4bn 63 _______________________________________________________________________________________________ 1. Annual Premium Equivalent (APE) = total new annual premiums plus 10% of single premiums, including ISAs and unit trusts UK life and pensions - Q1 up 15% to £239m APE New business APE (£m) Q1 2006 Q1 2005 % change _______________________________________________________________________________________________ Protection 56 54 4 Annuities 33 44 (25) Savings: - Unit linked bonds 61 44 39 - Pensions - Stakeholder and other non profit 41 31 32 With-profits 48 35 37 _______________________________________________________________________________________________ Total UK life and pensions 239 208 15 _______________________________________________________________________________________________ Protection - Q1 up 4% to £56m APE The recovery in mortgage application volumes experienced towards the end of 2005 has fed through to improved protection sales in Q1 2006. Sales of annual premium mortgage related protection business increased by 30% to £26m (Q1 2005: £20m). Other retail protection business was broadly in line with the same quarter last year at £13m (Q1 2005: £12m). Group risk new annual premiums fell from £22m in Q1 2005 to £17m in Q1 2006. 2004 and 2005 volumes in this segment benefited from the withdrawal of a competitor at the end of 2003. In addition, market activity was lower in the first quarter 2006 as intermediaries and their customers focused on preparations for A-Day. We believe this reduced volume of new business represents a more sustainable level going forward, albeit double the average level of quarterly sales in this segment achieved by Legal & General in 2003. Annuities - Q1 down 25% to £33m APE At £56m, single premium sales of non profit individual annuities were 68% lower than Q1 2005 (£174m) and 23% below Q4 2005 (£73m). Competitive pricing has been a feature of this market over the last nine months. We remain comfortable seeing a lower market share whilst the available returns do not meet our profit requirements. Comparisons against performance in the first half of 2005 will, therefore, remain challenging. At £277m, sales of single premium bulk purchase annuities were 5% above Q1 2005 (£264m). This included one medium-sized scheme of over £100m, with other new business driven by smaller cases. Quotation volumes remain strong. Savings: Unit linked bonds - Q1 up 39% to £61m APE Sales of single premium unit linked bonds rose by 39% to £605m (Q1 2005: £434m), continuing the trend of strong growth seen throughout 2005. In Q1 2006, we benefited from the launch of our multi-fund bond to IFAs using the platform developed with Cofunds and we anticipate this will provide increasing volumes of new business going forward. Savings: Pensions - Q1 up 32% to £41m APE Pensions volumes grew by 32% over the quarter to £41m APE (Q1 2005: £31m APE), due to good growth in employer related pensions business and increased levels of transfer activity in the run-up to pensions A-Day on 6 April. New annual premium pensions business increased by 42% in Q1 to £27m (Q1 2005: £19m) and single premium new business grew by 15% to £142m (Q1 2005: £124m). With-profits - Q1 up 37% to £48m APE New business from with-profits individual pensions increased by 52% to £41m APE (Q1 2005: £27m APE), owing mainly to an increase in pensions transfer activity ahead of pensions A-Day. With-profits bond sales continued to decline to £21m (Q1 2005: £57m). International life and pensions - Q1 up 13% to £27m APE In our US operations, new business of $19m APE was in line with Q1 2005 ($19m APE). Returns in sterling terms of £11m APE (Q1 2005: £10m APE) reflected a strengthened dollar. Our businesses in the Netherlands and France continued to show good growth. New business increased to €14m APE (Q1 2005: €12m APE) in the Netherlands and to €10m APE (Q1 2005: €8m APE) in France, driven by strong single premium savings business. Overall, new business from our overseas operations in sterling terms increased by 13% from £24m to £27m of APE. Retail investments - Q1 up 65% to £124m APE New retail investments business increased by 65% to £124m APE (Q1 2005: £75m APE) as investor confidence in equity markets continued to improve. Sales of single payment ISAs were up 25% to £105m (Q1 2005: £84m) and single payment unit trust new business grew 72% to £1,090m (Q1 2005: £634m). Demand was strong from both retail and institutional customers. Investment management - Q1 up 63% to £5.6bn Institutional new business volumes continue to grow strongly, increasing by £2.2bn, or 63%, to £5.6bn in Q1 2006 (Q1 2005: £3.4bn). We continued to attract an average of over £1bn per month of new business from pension fund clients and we saw significant growth also from non-pension fund institutions. Outlook We expect further market growth in the investment, savings and protection markets throughout 2006 and believe Legal & General is well placed to capitalise on these opportunities. Our relationship with Cofunds is already bearing fruit and we expect that the advantages of this technology will become increasingly valued by both customers and intermediaries. New products have been launched, such as a Self Invested Personal Pension product on the Cofunds platform and a pension term assurance product, and we expect further developments later this year. Mortgage transaction volumes are increasing and associated protection sales are expected to continue to grow. We are confident that, with our broad product range and distribution strength, Legal & General will continue to deliver strong results throughout 2006. Enquiries to: Investors: Peter Horsman, Head of Investor Relations 020 7528 6362 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 in the News and Results section of our shareholder web site at http://investor.legalandgeneral.com/releases.cfm •Issued share capital at 31 December 2005 was 6,507,421,932 shares of 2.5p each. Financial Calendar 2006: ________________________________________________________________________________ Annual General Meeting 18 May ________________________________________________________________________________ Payment of 2005 final dividend 22 May ________________________________________________________________________________ Interim results and second quarter new business 27 July ________________________________________________________________________________ Ex-dividend date for interim dividend 6 September ________________________________________________________________________________ Record date for interim dividend 8 September ________________________________________________________________________________ Payment date for interim dividend 2 October ________________________________________________________________________________ Third quarter new business results 18 October ________________________________________________________________________________ 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'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 regulatory authorities, the impact of competition and the policies and actions of governmental and regulatory authorities, the timing impact and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General Group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in Legal & General Group'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 2006 WORLDWIDE NEW BUSINESS Three months to 31 March 2006 Three months to 31 March 2005 Annual Single APE Annual Single APE Increase/ premiums premiums premiums premiums (decrease) £m £m £m £m £m £m % ______________________________________________________________________________________________________________ UK life and pensions business - Protection 56 - 56 54 - 54 4 - Annuities - 333 33 - 438 44 (25) - Savings - Unit linked bonds - 605 61 - 434 44 39 - Pensions - Stakeholder and other 27 142 41 19 124 31 32 non profit - With-profits 29 190 48 19 160 35 37 ______________________________________________________________________________________________________________ Total UK life and pensions business 112 1,270 239 92 1,156 208 15 International life and pensions business - USA 11 - 11 10 - 10 10 - Netherlands 3 59 9 4 46 8 13 - France 1 59 7 1 47 6 17 ______________________________________________________________________________________________________________ Total international life and pensions 15 118 27 15 93 24 13 business UK retail investment business 4 1,195 124 3 718 75 65 France retail investment business - 5 - - 5 - N/A ______________________________________________________________________________________________________________ Total retail investment business 4 1,200 124 3 723 75 65 ______________________________________________________________________________________________________________ Worldwide new business 131 2,588 390 110 1,972 307 27 ______________________________________________________________________________________________________________ WORLDWIDE NEW BUSINESS QUARTERLY PROGRESSION 3 months 3 months 3 months 3 months 3 months to to to to to 31.03.06 31.12.05 30.09.05 30.06.05 31.03.05 ______________________________________________________________________________________________________________ UK life and pensions business - Protection 56 46 54 54 54 - Annuities 33 40 35 35 44 - Savings - Unit linked bonds 61 60 54 50 44 - Pensions - Stakeholder and other non profit 41 39 40 42 31 - With-profits 48 40 37 38 35 ______________________________________________________________________________________________________________ Total UK life and pensions business 239 225 220 219 208 International life and pensions business - USA 11 12 11 9 10 - Netherlands 9 7 8 6 8 - France 7 6 8 16 6 ______________________________________________________________________________________________________________ Total international life and pensions business 27 25 27 31 24 UK retail investment business 124 67 79 94 75 France retail investment business - - 1 1 - ______________________________________________________________________________________________________________ Total retail investment business 124 67 80 95 75 ______________________________________________________________________________________________________________ Worldwide new business APE 390 317 327 345 307 ______________________________________________________________________________________________________________ Legal & General Group Plc Unaudited New Business Premiums Three months to 31 March 2006 UK LIFE AND PENSIONS NEW BUSINESS Three months to 31 March 2006 Three months to 31 March 2005 Annual Single APE Annual Single APE Increase/ premiums premiums premiums premiums (decrease) £m £m £m £m £m £m % ______________________________________________________________________________________________________________ Protection - Mortgage related 26 - 26 20 - 20 30 - Other 13 - 13 12 - 12 8 - Group risk 17 - 17 22 - 22 (23) ______________________________________________________________________________________________________________ Annuities - Individual - 56 5 - 174 17 (71) - Bulk purchase - 277 28 - 264 27 4 ______________________________________________________________________________________________________________ Savings - Unit linked bonds - 605 61 - 434 44 39 - Individual pensions 27 142 41 19 124 31 32 ______________________________________________________________________________________________________________ With-profits - Annuities - 20 2 - 9 1 100 - Individual pensions 28 131 41 18 88 27 52 - DWP rebates - 17 2 - 5 - N/A - Group pensions 1 1 1 1 1 1 - - Bonds - 21 2 - 57 6 (67) ______________________________________________________________________________________________________________ Total UK life and pensions business 112 1,270 239 92 1,156 208 15 ______________________________________________________________________________________________________________ INVESTMENT MANAGEMENT Three months to 31 Increase/ March 2006 2005 (decrease) £m £m % UK Managed Funds - Pooled funds 3,763 3,314 14 - Segregated funds 61 42 45 ______________________________________________________________________________________________________________ 3,824 3,356 14 UK Other 1,739 57 2,951 ______________________________________________________________________________________________________________ Total new funds 5,563 3,413 63 ______________________________________________________________________________________________________________ Legal & General Group Plc Unaudited New Business Premiums Three months to 31 March 2006 INTERNATIONAL OPERATIONS IN LOCAL CURRENCY Three months to 31 March 2006 Three months to 31 March 2005 Increase/ Annual Single APE Annual Single APE (decrease) premiums premiums premiums premiums % ______________________________________________________________________________________________________________ USA ($m): 19 - 19 19 - 19 - Netherlands (€m): 5 86 14 5 66 12 17 France (€m): - Life and pensions 1 86 10 1 68 8 25 - Unit trusts - 7 - - 6 - N/A ______________________________________________________________________________________________________________ UK RETAIL BUSINESS APE BY CHANNEL Three months to 31 March 2006 Annual Single Total APE % of £m £m £m total ______________________________________________________________________________________________________________ Independent financial advisers 65 157 222 70 Tied 29 56 85 27 Direct 4 6 10 3 ______________________________________________________________________________________________________________ Total 98 219 317 100 ______________________________________________________________________________________________________________ Three months to 31 March 2005 Annual Single Total APE % of £m £m £m total ______________________________________________________________________________________________________________ Independent financial advisers 48 89 137 59 Tied 21 66 87 37 Direct 3 6 9 4 ______________________________________________________________________________________________________________ Total 72 161 233 100 ______________________________________________________________________________________________________________ Legal & General Group Plc Unaudited New Business Premiums Three months to 31 March 2006 UK NEW BUSINESS Three months to 31 Increase/ March 2006 2005 (decrease) £m £m % ______________________________________________________________________________________________________________ UK INDIVIDUAL LIFE AND PENSIONS BUSINESS New annual premiums Life: - Mortgage related 26 20 30 - Protection 13 12 8 Pensions: - Individual pensions - non profit 27 19 42 - Individual pensions - with-profits 28 18 56 ______________________________________________________________________________________________________________ Total new annual premiums 94 69 36 Single premiums Life: - With-profits 21 57 (63) - Unit-linked 605 434 39 Pensions: - Individual pensions - non profit 142 124 15 - Individual pensions - with-profits 131 88 49 - Individual annuities - non profit 56 174 (68) - Individual annuities - with-profits 20 9 122 - DWP rebates 17 5 240 ______________________________________________________________________________________________________________ Total single premiums 992 891 11 ______________________________________________________________________________________________________________ Individual life and pensions total APE 193 158 22 ______________________________________________________________________________________________________________ UK RETAIL INVESTMENTS New annual premiums - ISAs/PEPs 3 3 - - Unit trusts 1 - N/A ______________________________________________________________________________________________________________ Total new annual premiums 4 3 33 Single premiums - ISAs/PEPs 105 84 25 - Unit trusts 1,090 634 72 ______________________________________________________________________________________________________________ Total single premiums 1,195 718 66 ______________________________________________________________________________________________________________ UK retail investments total APE 124 75 65 ______________________________________________________________________________________________________________ UK retail business total APE 317 233 36 ______________________________________________________________________________________________________________ UK CORPORATE LIFE AND PENSIONS BUSINESS New annual premiums - Group risk 17 22 (23) - Group pensions 1 1 - ______________________________________________________________________________________________________________ Total new annual premiums 18 23 (22) Single premiums - Bulk purchase annuities 277 264 5 - Other group business 1 1 - ______________________________________________________________________________________________________________ Total single premiums 278 265 5 ______________________________________________________________________________________________________________ UK corporate life and pensions APE 46 50 (8) ______________________________________________________________________________________________________________ UK business total APE 363 283 28 ______________________________________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock Exchange

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