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LGEN's Q3 cash

By BFN News | 07:24 AM | Wednesday 04 November, 2015


Legal & General reports another quarter of strong cash generation with operational cash for the group up 11% to £936m in the first nine months of the year (Q3 YTD 2014: £844m). The group says the new business surplus of £7m (Q3 YTD 2014: strain of £17m) primarily reflects improved efficiency and increasing scale in UK Protection and Savings, and the implementation of its 'capital lite' strategy for new UK pension risk transfer business. As a result net cash generation is up 14% at £943m (Q3 2014 YTD: £827m). Total annuity assets increased by 8% to £43.1bn (Q3 2014: £39.9bn). Annuity sales were £1.5bn (Q3 YTD 2014: £3.9bn), with 2014 benefitting from the £3bn buy-in transaction with ICI pension fund. Bulk annuity sales were £1,238m YTD (Q3 YTD 2014: £3,368m). Q3 was a quieter quarter with completions of £92m (Q3 2014: £233m) from 15 bulk annuity transactions (Q3 2014: 14 transactions). In October 2015 we completed our first US pension de-risking transaction, entering into an agreement to provide retirement payments to 14,000 of Royal Philip's retirees and other former employees for $900m, shared equally with The Prudential Insurance Company of America. This business has been written by Legal & General America, with the associated asset management for our 50% provided by Legal & General Investment Management America (LGIMA). Lifetime mortgage completions were £102m YTD (Q3 YTD 2014: £nil) with £65m of advances in Q3 and applications currently running at around £10m per week. Following the Budget reforms to the annuity market, Individual annuity sales were down 48% at £262m (Q3 YTD 2014: £508m). We have seen the proportion of people taking their pension savings as cash increase to 90% from 60% before the introduction of the Pensions Reform legislation. Our average payment size is £12k. Legal & General Investment Management's total assets under management increased 8% to £717.0bn (Q3 2014: £662.1bn) reflecting external net inflows of £21.7bn (Q3 YTD 2014: £8.3bn). In the third quarter, external net inflows were £7.9bn (Q3 2014: £0.2bn outflows), representing the second successive quarter of positive external net flows across all our major asset classes. Our UK retail business had another strong quarter with external net flows of £0.6bn (Q3 2014: £0.0bn). Story provided by StockMarketWire.com

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