L&G Q1 New Business Results
Legal & General Group PLC
27 April 2005
27 April 2005
Legal & General Group Plc
=========================
New business results - first quarter 2005
=========================================
• Worldwide sales up 43% to £307m APE (Note 1)
- Core UK individual life and pensions up 21%
- Exceptional growth in retail investments and group life and
pensions
• New fund management business of £3.4bn
- Total funds under management £167bn
New business APE Q1 2005 Q1 2004 Change
UK individual business
- life and pensions £158m £131m +21%
- retail investments £75m £39m +92%
- total individual business £233m £170m +37%
UK group life and pensions £50m £23m +117%
UK total £283m £193m +47%
International (including unit trusts) £24m £22m +9%
Worldwide total £307m £215m +43%
Note 1: Annual Premium Equivalent (APE) is total new annual premiums + 10% of
single premiums for life, pensions and retail investment business.
Group Chief Executive, David Prosser, said:
'Legal & General's carefully built brand, distribution and product strengths
have delivered an impressive start to 2005. Worldwide new business has grown by
43% and, within this, UK new business has increased by 47%.
'Our UK individual life and pensions business grew 21%, driven by superior
performance in both unit-linked bonds and individual pensions. Our retail
investments business benefited from some significant one-off contributions.
Group life and pensions business has more than doubled, with high levels of bulk
purchase annuity sales and good growth in group risk at maintained margins. We
have recently experienced some increased competition in the individual
protection market, but market conditions and pricing for other life and pensions
products remain unchanged.
'For the twenty-ninth consecutive quarter, Legal & General Investment Management
has averaged over £1bn of new funds each month.
'Looking forward to the rest of 2005, we expect to continue to build our market
share profitably.'
Overview
========
Our UK business continued to benefit from our broad spread of good value
products and our wide distribution network. Individual life and pensions
business was 21% ahead of the corresponding quarter last year, albeit lower than
the final quarter of 2004, reflecting both the housing market downturn and
increased competition in life protection products. In the corporate market, we
made good progress in both group risk business and in bulk purchase annuities.
Our Continental European businesses have shown good growth in single premiums
although in the USA, new annual premium business was slightly lower.
Legal & General Investment Management achieved strong growth in funds under
management to £167bn (2004: £143bn) adding a further £3.4bn of new business.
UK new business
===============
Individual life
---------------
Annual premium sales for mortgage related protection business fell to £20m
(2004: £25m) as the impact of a slowing housing market was only partly offset by
extending distribution. Other protection business remained steady at £12m.
Although overall volumes were lower, we are confident Legal & General has
maintained its leading market share in life protection business.
Continued strong demand for unit-linked bonds, where volumes rose 66%, more than
offset the decline in with-profits bond sales. In aggregate, single premium
sales for the quarter rose to £491m (2004: £384m), an increase of 28%.
Individual pensions
-------------------
New annual premium business benefited from an improved service offering, growing
32% to £37m (2004: £28m). Single premium new business also grew strongly - up
47% to £400m (2004: £273m) with a significant increase in pension transfer
business and maintained individual annuity volumes.
Unit trusts and ISAs
--------------------
While regular and single payment ISA sales fell, single payment unit trust sales
more than trebled to £634m. In total, ISA and unit trust sales grew to £75m APE
(2004: £39m). This figure included £15m APE of institutional sales (2004: £5m)
and further benefited from the restructuring of a number of Barclays UK funds
which resulted in a one off benefit of £32m APE in new business to
Legal & General.
Group life and pensions
-----------------------
New business increased to £50m APE (2004: £23m), with good progress in group
risk business and significantly increased levels of bulk purchase annuities.
Group risk new annual premiums were £22m over the quarter (2004: £13m). Single
premiums for bulk purchase annuity business, where we continued to maintain
pricing discipline, were £264m from 55 schemes compared to £91m in the
corresponding quarter last year.
Institutional fund management
=============================
Legal & General Investment Management is the largest UK equity investor and
continued its record of averaging £1bn new business per month with total new
business of £3.4bn over the quarter. At 31 March 2004, total funds under
management were £167bn.
International business
======================
In the USA, annual premium new business was $19m (2004: $22m). New business
received was lower in the first quarter of 2005 but recent levels of
applications have recovered.
Our Continental European operations produced increased new business of €20m APE
(2004: €16m). Annual premium business was broadly stable but single premium
business, including unit trusts, grew by 26%.
In sterling terms and based on average exchange rates, total international new
business increased to £24m APE (2004: £22m).
UK distribution
===============
Late in 2004 we announced an important, single tie agreement with Bradford &
Bingley. We started advising customers on term assurance in the middle of
January and have introduced the first stage of our multi-fund proposition at the
beginning of April.
At the beginning of March, Barclays Bank announced that their existing IFA and
tied advisers will switch to a multi-tied basis. The existing mortgage related
term assurance business will remain tied to Legal & General. As mentioned above,
we have also benefited from the restructuring of some of Barclays UK investment
funds.
Earlier this month, we announced an £18.6m investment in the distribution
platform Cofunds, reinforcing our commitment to fund choice for advice based
sales in insurance bonds, unit trusts, ISAs and pensions. Cofunds is one of the
fastest growing platforms and one which is committed to supporting financial
intermediaries.
The introduction of the regulation of mortgage advice at the end of last year
provided an opportunity for us to further develop mortgage related distribution.
Legal & General Partnership Services has established a network of over 2,200
tied mortgage advisers selling Legal & General protection products. Our
e-enabled proposition is market leading and provides an excellent platform for
growth.
Outlook
=======
We believe our first quarter results show further improvement in consumer
confidence in savings and investment products. Additionally, we expect the trend
for market share concentration to continue and with Legal & General's strengths
in brand, distribution and good value for money products, we believe we will
continue to gain market share profitably.
Enquiries
=========
For further information contact:
Investors: Media:
Peter Horsman John Morgan
Head of Investor Relations Head of Public Relations
020 7528 6362 01737 375353
Nicola Marshall Anthony Carlisle
Investor Relations Manager Citigate Dewe Rogerson
020 7528 6263 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:
28 July 2005 Interim results and second quarter new business
20 October 2005 Third quarter new business.
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2005
NEW UK BUSINESS Three months to
=============== 31 March increase/
2005 2004 (decrease)
£m £m %
INDIVIDUAL LIFE AND PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 20 25
- Protection 12 12
Pensions:
- Individual pensions 37 28
------- ------- ------
Total new annual premiums 69 65 6
Single premiums
Life:
- With-profits 57 123
- Unit linked 434 261
Pensions:
- Individual pensions 212 87
- Annuities - individual 183 182
- DWP rebates 5 4
------- ------- ------
Total single premiums 891 657 36
------- ------- ------
Individual life and pensions APE 158 131 21
======= ======= ======
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs (excluding cash ISAs) 3 6
- Unit trusts 0 1
------- ------- ------
Total new annual premiums 3 7 (57)
Single premiums
- ISAs/PEPs (excluding cash ISAs) 84 122
- Unit trusts 634 201
------- ------- ------
Total single premiums 718 323 122
ISAs, PEPs and ------- ------- ------
unit trusts APE 75 39 92
======= ======= ======
------- ------- ------
Total individual business APE 233 170 37
======= ======= ======
GROUP LIFE AND PENSIONS BUSINESS
New annual premiums
- Group risk 22 13
- Group pensions 1 1
------- ------- ------
Total new annual premiums 23 14 64
Single premiums
- Annuities - bulk purchase 264 91
- Other group business 1 1
------- ------- ------
Total single premiums 265 92 188
------- ------- ------
Group life and pensions APE 50 23 117
------- ------- ------
Total UK APE 283 193 47
======= ======= ======
INSTITUTIONAL FUND MANAGEMENT
UK Managed Funds
- Pooled funds 3,314 4,412
- Segregated funds 42 962
------- ------- ------
3,356 5,374 (38)
UK Other 57 57
------- ------- ------
3,413 5,431 (37)
======= ======= ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2005
WORLDWIDE NEW BUSINESS
======================
Three months to
31 March increase/
2005 2004 (decrease)
£m £m %
Annual premiums
Life and pensions:
- Life 54 50
- Pensions 38 29
------- ------- ------
UK 92 79 16
- USA 10 12
- Netherlands 4 3
- France 1 0
------- ------- ------
Total life and pensions 107 94 14
Retail investment business:
- UK 3 7
------- ------- ------
Total new annual premiums 110 101 9
Single premiums
Life and pensions:
- Life 491 384
- Pensions 665 365
------- ------- ------
UK 1,156 749 54
- USA 0 0
- Netherlands 46 41
- France 47 30
------- ------- ------
Total life and pensions 1,249 820 52
Retail investment business:
- UK 718 323
- France 5 4
------- ------- ------
Total single premiums 1,972 1,147 72
Annual premium equivalent (APE)
- UK life and pensions business 208 154
- Overseas life and pensions business 24 22
------- ------- ------
Total life and pensions business 232 176 32
- UK retail investment business 75 39
- Overseas retail investment business 0 0
------- ------- ------
Total retail investment business 75 39 92
------- ------- ------
Worldwide APE 307 215 43
======= ======= ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2005
OVERSEAS OPERATIONS
IN LOCAL CURRENCY
=================
Three months to
31 March increase/
2005 2004 (decrease)
USA ($m):
New annual premiums 19 22
Single premiums 0 0
APE 19 22 (14)
Netherlands (€m):
New annual premiums 5 4
Single premiums 66 60
APE 12 10 20
France (€m):
New annual premiums 1 1
Single premiums 68 45
Unit trusts 6 6
APE 8 6 33
UK INDIVIDUAL APE BY CHANNEL
============================
Three months to 31 March 2005
Annual Single Total APE
£m £m £m %
Independent financial advisers 48 89 137 59
Single tie 21 66 87 37
Direct 3 6 9 4
------ ------ ------ ------
72 161 233 100
====== ====== ====== ======
Three months to 31 March 2004
Annual Single Total APE
£m £m £m %
Independent financial advisers 38 63 101 60
Single tie 30 28 58 34
Direct 4 7 11 6
------ ------ ------ ------
72 98 170 100
====== ====== ====== ======
This information is provided by RNS
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