Uncertainty caused by proposed CGT changes and ongoing equity market volatility smashed Legal & General (L&G) unit-linked bond sales in Q1 this year, down 46% to £40m.
Sales of the bonds fell sharply on the £74m recorded in Q1 2007 and dipped on the £53m seen in Q4 last year.
Overall, L&G reported a slight dip in Q1 UK new business, down 1% from the £338m recorded in the corresponding period last year to £335m. However, new business did increase 2% on the £328m figure in Q4 2007.
Worldwide new business has increased 1% in Q1 however, up from £368m to £372m. Global sales are also ahead on Q4 last year, up 6%.
While the firm’s overall business was solid, individual protection fell 14% to £36m and individual non-profit annuities dropped 28% to £18m.
Meanwhile, the firm’s core retail investment new business climbed 20% to £42m in Q1, while investment management gross new business increased from £5.5bn to £6.1bn.
L&G group chief executive Tim Breedon says the steady figures show the strength of the company amid the changing economic and industry conditions.
“We recognise the challenges of investment market volatility, the housing market slow-down and consumer uncertainty. But we also see the opportunities,” he says.
“We have taken a leading position in the rapidly expanding pension buyout market; we see long term growth in mass affluent and high net worth savings; our investment management business continues its winning formula; and we are deploying our expertise in selected overseas markets.
“We have the financial and operational strength to weather short term uncertainties, whilst seizing the opportunities which will support long term profitable growth.”
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