Q3 2000 New Business Results
Legal & General Group PLC
19 October 2000
Legal & General Group Plc
New business - nine months to 30 September 2000
A record £12bn placed with the Group for savings and protection
New life and pensions Nine months to 30.9.00 (Note 2)
business EPI (Note 1)
Worldwide £401m + 8%
International £71m +20%
UK individual £280m +12%
Total EPI including unit trusts/ISAs (Note 1) £473m + 2%
New fund management business £9.6bn + 5%
Worldwide funds under management £112bn +22% (Note 3)
Note 1: EPI - equivalent premium income, which comprises new annual
premiums + 10% of single premiums.
Note 2: The percentage shown is the growth over the equivalent period
in 1999.
Note 3: Growth from 30/9/99.
Group Chief Executive, David Prosser, said: 'Legal & General continues
to see good new business growth in a more difficult market. The UK is
currently experiencing a pause in the growth pattern of recent years.
However, against this background, with new individual life and pensions
business growing by 12%, we continue to build market share.
'A record figure has been achieved by our fund management business with
£9.6bn of new funds placed by institutional investors. The market's
increasing recognition of the wisdom of a core and satellite investment
strategy will bring further successes for our market leading fund
management business.
'In the pre Stakeholder pensions market, I am particularly pleased to
report that our group personal pension business has grown by 25% in the
first nine months of the year. The affinity group schemes, which we
have been awarded in the last three months, cover a potential membership
of over 1.5 million. They underline our determination to capture a
significant share of the Stakeholder pensions market.'
UK Business
===========
Individual life and pensions
----------------------------
In the third quarter, Legal & General achieved growth in new EPI of 12%
over the same period last year. New business for the first nine months
also increased by 12% to £280m EPI (30.9.99: £251m). This continued
growth, building on record results in 1999, reflects the resilience of
Legal & General's strategy in a highly competitive marketplace. It
also benefits from the continuing roll-out of business to consumer
internet applications which now cover term assurance, pensions,
with-profits bonds, ISAs and mortgage loans.
Pensions
--------
Legal & General is developing the products and systems to take full
advantage of the launch of Stakeholder pensions in April 2001. We have
benefited from our prominent position in the group personal pensions
market, where strong new business growth has been a major contributor
to the 29% EPI growth achieved in the third quarter of 2000. Over the
first nine months of 2000, total pensions new business has increased
16% to £128m (30.9.99: £110m). Sales of annuity business in the first
nine months of 2000 have grown by 47% to £310m.
Life
----
Single premium with-profits bond sales increased 84% to £201m in the
third quarter (July to September 1999: £109m). Over the first nine
months of the year single premium bond sales totalled £550m - an
increase of 12% over the corresponding period in 1999.
Legal & General's strengths in the housing market led to a 10% increase
in mortgage related annual premiums over the first nine months of 2000
to £86m (30.9.99: £78m). However, third quarter new business reflected
the lower level of transactions in the housing market and an increasing
trend towards repayment mortgages.
Unit trusts and ISAs
--------------------
In the unit trust and ISA market investors continued to focus on
specialist or themed funds. Legal & General's main offering in this
area remains its range of index tracking funds although two more
specialist tracking funds and two actively managed funds are to be
added in the fourth quarter. Although sales this year have been below
the level of 1999 when we benefited from a strong final PEP season, we
are a market leader in index tracking ISAs. New business of £69m EPI
in the first nine months of 2000 compared to £88m in the corresponding
period last year.
Group life and pensions
-----------------------
New group risk and group pensions business over the first nine months,
totalled £50m EPI - a decrease of 21% (30.9.99: £63m).
A major component of this market is bulk purchase annuity business
where year on year comparisons are affected by the relatively low
volumes which have been placed in the market this year pending the
outcome of an appeal case regarding the equalisation of Guaranteed
Minimum Pension rights. However, Legal & General continues to win a
significant share of the schemes placed.
Group risk continues its strong performance with new business totalling
£25m EPI over the first nine months of 2000 (30.9.99: £18m),
reflecting growing market confidence in our ability to deliver value
for money products.
Fund management
---------------
The success and scale of our fund management business, in particular
our index fund capability, continues to be a key differentiator for
Legal & General. During the third quarter, an exceptional £3.7bn of
new fund management business was secured - an increase of 19% over the
corresponding period last year. New external funds gained during the
year to date now total £9.6bn (30.9.99: £9.1bn), including £1.1bn of
institutional business from the Commonwealth Bank of Australia.
International life and pensions
-------------------------------
Our business in the USA continues to develop its market position as a
major writer of term assurance for up-market customers. Over the first
nine months of the year, EPI, which is almost entirely annual premium
business, grew by 4% to $76m (30.9.99: $73m). This does not match
the exceptional growth rate achieved in 1999 when some sales were
brought forward in anticipation of changes in product availability and
pricing prior to the implementation of the triple X solvency
requirements.
Our European businesses have benefited from a strong competitive
position and have achieved above market growth. In France, new
business volumes in the first nine months of 2000 increased by 41% to
EUR 24m EPI (30.9.99: EUR 17m). We expect this business
to experience continuing growth in market share.
In the Netherlands, new business in the first nine months of 2000
increased by 30% to EUR 13m EPI (30.9.99: EUR 10m) contrasting
favourably with the decline in business seen in the market overall.
The strong support we have received from brokers for our product
initiatives has been key to the market share growth achieved this year.
For further information contact:
Investors: Peter Horsman Media: John Morgan
Investor Relations Manager Head of Public Relations
020 7528 6362 020 7528 6213
Anthony Carlisle
Citigate, Dewe Rogerson
020 7638 9571
LEGAL & GENERAL GROUP PLC
UNAUDITED NEW BUSINESS PREMIUMS
NINE MONTHS TO 30 SEPTEMBER 2000
NEW UK BUSINESS
===============
Nine months to Three months to
30 September increase/ 30 September increase/
2000 1999 (decrease) 2000 1999 (decrease)
£m £m % £m £m %
INDIVIDUAL LIFE AND
PENSIONS BUSINESS
New annual premiums
Life:
- Mortgage related 86 78 29 33
- Savings 1 1 1 0
- Protection 10 13 4 5
Pensions:
- Individual
pensions 61 58 19 18
Total new annual --- --- --- --- --- ---
premiums 158 150 5 53 56 (5)
Single premiums
Life:
- With profits 468 342 201 109
- Other 82 150 22 63
Pensions:
- Individual
pensions 287 221 130 86
- Annuities
- individual 310 211 121 74
- DSS rebates 76 88 50 44
Total single ----- ----- --- --- --- ---
premiums 1,223 1,012 21 524 376 39
Individual life --- --- --- --- --- ---
and pensions EPI 280 251 12 105 94 12
GROUP LIFE AND
PENSIONS BUSINESS
New annual premiums
- Group risk 25 18 11 8
- Group pensions 7 6 4 3
Total new annual --- --- --- --- --- ---
premiums 32 24 33 15 11 36
Single premiums
- Annuities -
bulk purchase 122 338 31 41
- Other group
business 58 53 25 23
Total single --- --- --- --- --- ---
premiums 180 391 (54) 56 64 (13)
Group life and --- --- --- --- --- ---
pensions EPI 50 63 (21) 20 17 18
ISAS, PEPS AND UNIT TRUSTS
New annual premiums
- ISAs/PEPs
(excluding cash
ISAs) 14 12 17 3 8 (63)
Single premiums
- ISAs/PEPs
(excluding cash
ISAs) 345 555 49 87
- Unit trusts 207 210 63 86
Total single --- --- --- --- --- ---
premiums 552 765 (28) 112 173 (35)
ISAs, PEPs and
unit trusts EPI --- --- --- --- --- ---
69 88 (22) 14 25 (44)
--- --- --- --- --- ---
Total UK EPI 399 402 (1) 139 136 2
=== === === === === ===
INSTITUTIONAL ----- ----- --- ----- ----- ---
FUND MANAGEMENT 9,599 9,148 5 3,730 3,144 19
WORLDWIDE NEW BUSINESS
======================
Nine months to Three months to
30 September increase/ 30 September increase/
2000 1999 (decrease) 2000 1999 (decrease)
£m £m % £m £m %
New annual premiums
Life and pensions:
- Life 122 110 45 46
- Pensions 68 64 23 21
--- --- --- --- --- ---
UK 190 174 9 68 67 1
- USA 52 44 12 13
- Netherlands 4 4 1 1
- France 4 4 1 1
Total life and --- --- --- --- --- ---
pensions 250 226 11 82 82 0
Retail investment
business:
- UK 14 12 3 8
Total new annual --- --- --- --- --- ---
premiums 264 238 11 85 90 (6)
Single premiums
Life and pensions:
- Life 550 492 223 172
- Pensions 853 911 357 268
----- ----- --- --- --- ---
UK 1,403 1,403 0 580 440 32
- USA 0 1 0 0
- Netherlands 30 26 8 8
- France 78 46 22 16
Total life and ----- ----- --- --- --- ---
pensions 1,511 1,476 2 610 464 31
Retail investment
business:
- UK 552 765 112 173
- France 27 25 7 9
Total single ----- ----- --- --- --- ---
premiums 2,090 2,266 (8) 729 646 13
Equivalent premium
income (EPI)
- Life and pensions
business 401 373 8 143 128 12
- Retail investment
business 72 91 (21) 15 26 (42)
--- --- --- --- --- ---
Worldwide EPI 473 464 2 158 154 3
=== === === === === ===
OVERSEAS OPERATIONS
IN LOCAL CURRENCY
=================
Nine months to increase/
30 September (decrease)
2000 1999 %
USA ($m):
New annual premiums 76 73
Single premiums 1 1
EPI 76 73 4
Netherlands (EUR m)
New annual premiums 8 6
Single premiums 50 41
EPI 13 10 30
France (EUR m)
New annual premiums 6 6
Single premiums 130 72
Unit trusts 46 38
EPI 24 17 41
UK INDIVIDUAL EPI BY CHANNEL
============================
Nine months to 30 September 2000
Annual Single Total EPI
£m £m £m %
Independent financial
advisers 92 120 212 61
Business partnerships 59 24 83 24
Direct 21 33 54 15
--- --- --- ---
172 177 349 100
=== === === ===
Nine months to 30 September 1999
Annual Single Total EPI
£m £m £m %
Independent financial
advisers 79 113 192 57
Business partnerships 66 23 89 26
Direct 17 41 58 17
--- --- --- ---
162 177 339 100
=== === === ===
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