New Business Results Q1 2002
Legal & General Group PLC
11 April 2002
11 April 2002
Legal & General Group Plc
New business results - first quarter 2002
• Another record new business result
• New institutional fund management business of £3bn
• Funds under management exceed £122bn
New business APE Q1 2002 Q1 2001 Change
UK total £208m £149m +40%
- UK individual business £190m £123m +54%
International £25m £25m
Total £233m £174m +34%
Note: Annual Premium Equivalent (APE) is total new annual premiums + 10% of
single premiums.
Group Chief Executive, David Prosser, said: 'This year has started very strongly
for Legal & General with good support from all channels and the benefit of our
major strategic alliances. These results underline the success of our strategy
of delivering profitable organic growth.
Our UK individual new business has shown an impressive performance across the
product range with growth of 54%. I expect this rate of growth will
significantly increase our market share. An outstanding achievement was 77%
growth in ISA and unit trust sales.
Our institutional fund management company continued to average £1bn new business
per month and has done so since January 1998.
Our UK long term fund has the highest possible rating from Standard & Poor's and
A M Best. This financial strength, together with our product range and
distribution capabilities, ensures that Legal & General's prospects for further
profitable growth remain strong.'
UK new business
New annual premium equivalent (APE) increased by 40% to £208m (2001: £149m).
Individual business grew by 54% to £190m APE (2001: £123m), reflecting the new
business volumes contributed by existing and new business partners, in
particular the strategic alliances with Barclays, Alliance & Leicester and
Northern Rock.
Individual life
Legal & General has retained its leading position in the housing related market.
Annual premium sales of £34m were up 13% (2001: £30m), as the strong position we
have continued to build in the life protection market has more than offset the
impact of our decision to withdraw our ISA mortgage repayment product.
Demand for single premium bonds remained buoyant, with sales more than doubling
to £401m (2001: £196m), benefiting from the contribution from our new
distribution partners.
Individual pensions
New annual premium business grew by 95% to £43m (2001: £22m), of which £40m was
written on Stakeholder terms. This reflects both our success in winning employer
Stakeholder business from fee based employee benefit consultants, and the
increasing membership in schemes with employer contributions.
Unit trusts and ISAs
Market statistics for January and February showed a sharp downturn in sales.
Against that background we have achieved exceptionally strong growth in new
business, achieving a double-digit share of the ISA market in the first two
months of the year.
New business APE reached £53m, an increase of 77% (2001: £30m). Demand was
strongest for our UK Index Trust, the Fixed Interest (corporate bond) and High
Income Trusts and for our Protected Portfolio product.
Group business
Group new business was £18m APE (2001: £26m), these lower volumes reflecting
reduced levels of demand in the bulk purchase annuity market. The decline in
this business from larger schemes appears to reflect the adverse impact of
equity markets on funding levels. However, despite price increases in October
2001, we continue to win encouraging volumes of bulk purchase business in the
small and mid-sized segment of the market.
Institutional fund management
Our institutional fund management subsidiary maintained its highly successful
track record by winning new business of £3bn in the quarter.
This also maintained our record of averaging over £1bn of new UK pension fund
investment business per month since January 1998.
Group funds under management at 31 March 2002 exceeded £122bn, up from £110bn a
year earlier.
International business
In the USA, new annual premium business increased by 24% to $21m (2001: $17m) as
we continue to develop our chosen niche market of term assurance for upper
income customers.
Our European businesses produced EUR. 16m APE (2001: EUR. 22m). Sales in the
Netherlands of EUR. 9m were 50% up on the final quarter of 2001 but did not
match the exceptional result of EUR. 11m achieved in the first quarter last
year. In France, where market conditions remain difficult, new business was EUR.
7m APE, matching the final quarter of 2001 but below the first quarter 2001
result of EUR. 11m.
UK Distribution
We have achieved volume growth in all distribution channels. The growing
contribution from Business Partners reflects the strategic alliances with
Barclays, Alliance & Leicester and Northern Rock, together with the record
number of smaller business partners recruited last year. Our success in
recruiting new agents continues in 2002.
In the IFA sector, we established a separate sales and servicing team in
December 2001 focussed on the needs of the major employee benefit consultants
and other fee based advisors. This reflects the growing importance of this
segment of the market.
Our Direct operation supports the increasing volumes of new business obtained on
a non-advised basis from lender partners such as Barclays and Alliance &
Leicester. These direct sales from our business partners amounted to £13m APE
(2001: £1m), reflecting the distribution power of our partners, together with
the strengths of Legal & General's brand, product range and direct capabilities.
We have also benefited from our facility for customers to purchase and manage
ISAs on line with 19% of Direct ISA sales over the quarter via the internet.
E-commerce functionality provided for our Direct customers is also utilised by
our Business Partners and in the IFA channel, most recently with the extension
of our on-line term assurance functionality to a broad range of protection
products.
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 2002:
30 April Annual General Meeting
25 July Interim Results and second quarter new business
18 October Third quarter new business
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2002
NEW UK BUSINESS Three months to
31 March increase/
2002 2001 decrease
£m £m %
INDIVIDUAL LIFE AND PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 24 23
- Protection 10 7
Pensions:
- Individual pensions 43 22
------ ------ ------
Total new annual premiums 77 52 48
Single premiums
Life:
- With-profits 353 179
- Other 48 17
Pensions:
- Individual pensions 78 87
- Annuities - individual 99 103
- DSS rebates 23 24
------ ------ ------
Total single premiums 601 410 47
Individual life ------ ------ ------
and pensions APE 137 93 47
====== ====== ======
Three months to
31 March increase/
2002 2001 decrease
£m £m %
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs
(excluding cash ISAs) 9 5
- Unit trusts 2 0
------ ------ ------
Total new annual premiums 11 5 120
Single premiums
- ISAs/PEPs
(excluding cash ISAs) 206 170
- Unit trusts 218 75
------ ------ ------
Total single premiums 424 245 73
ISAs, PEPs and ------ ------ ------
unit trusts APE 53 30 77
====== ====== ======
------ ------ ------
Total individual business APE 190 123 54
====== ====== ======
Three months to
31 March increase/
2002 2001 decrease
£m £m %
GROUP LIFE AND PENSIONS BUSINESS
New annual premiums
- Group risk 6 9
- Group pensions 2 2
------ ------ ------
Total new annual premiums 8 11 -27
Single premiums
- Annuities - bulk purchase 88 129
- Other group business 13 22
------ ------ ------
Total single premiums 101 151 -33
------ ------ ------
Group life and pensions APE 18 26 -31
====== ====== ======
------ ------ ------
Total UK APE 208 149 40
====== ====== ======
INSTITUTIONAL FUND MANAGEMENT
UK Managed Funds
- Pooled funds 2,548 3,247
- Segregated funds 420 7
------ ------
2,968 3,254
UK Other 36 6
------ ------ ------
Total fund management 3,004 3,260 -8
====== ====== ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2002
WORLDWIDE NEW BUSINESS
Three months to Three months to
31 March 2002 31 March 2001 increase/decrease
Annual Single Annual Single Annual Single
£m £m £m £m % %
LIFE AND PENSIONS
Life 40 401 39 196
Pensions 45 301 24 365
------ ------ ------ ------ ------ ------
UK 85 702 63 561 35 25
USA 15 0 12 0
Netherlands 2 32 2 47
France 1 29 2 29
------ ------ ------ ------ ------ ------
INSURANCE TOTAL 103 763 79 637 30 20
RETAIL INVESTMENT BUSINESS
UK 11 424 5 245
France 7 14
------ ------ ------ ------ ------ ------
TOTAL NEW BUSINESS 114 1,194 84 896 36 33
====== ====== ====== ====== ====== ======
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2002
OVERSEAS OPERATIONS IN LOCAL CURRENCY
Three months to increase/
31 March decrease
2002 2001 %
USA ($m):
New annual premiums 21 17
Single premiums 0 0
APE 21 17 24
Netherlands (Euro m):
New annual premiums 4 3
Single premiums 53 76
APE 9 11 -18
France (Euro m):
New annual premiums 1 4
Single premiums 47 46
Unit trusts 11 22
APE 7 11 -36
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
THREE MONTHS TO 31 MARCH 2002
UK INDIVIDUAL APE BY CHANNEL
Three months to 31 March 2002
Annual Single Total APE
£m £m £m %
Independent financial advisers 38 44 82 43
Business partnerships 38 43 81 43
Business partners direct 7 6 13 7
Direct 5 9 14 7
------ ------ ------ ------
88 102 190 100
====== ====== ====== ======
Three months to 31 March 2001
Annual Single Total APE
£m £m £m %
Independent financial advisers 31 43 74 60
Business partnerships 19 10 29 24
Business partners direct 0 1 1 1
Direct 7 12 19 15
------ ------ ------ ------
57 66 123 100
====== ====== ====== ======
This information is provided by RNS
The company news service from the London Stock Exchange
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