Legal & General posted an 8.7% increase in UK new business in the first half of 2007, with strong annuities sales more than offsetting declines in unit linked bonds and with-profits.
Total UK new business jumped from £684m in H1 2007 to £744m, while UK life and pensions new business climbed £31m to £629m (APE).
The solid sales figures led to a 1.8% increase in L&G UK life and pensions operating profit, to £506 (EEV). Worldwide, the firm recorded a 6.2% boost in operating profit to £626m – higher than forecasted.
However, taking into account a negative £538m variation on lower investment markets, L&G’s profit from ordinary activities after tax dipped to £56m, well under the £672m profit in the corresponding period last year.
Annuity sales doubled in the first half, up from £89m to £178m, while protection new business fell 1% on last year, to £110m.
Changes to CGT and continued market volatility hit unit-linked bond sales, down 45% in the first half to £75m. Individual pensions written in the with-profits fund fell to £85m, from £111m.
A direct sales drive through IFAs has boosted L&G’s core retail investments business, with new business up 34% against the turbulent market backdrop.
L&G group chief executive Tim Breedon says the firm delivered strong results amid the “challenging” conditions.
“We have continued to focus on exploiting the resilience of our business model to grow profitably,” he says.
“These results reflect the success of this approach and demonstrate our continued strengths: strong finances, multi-channel distribution, a diverse product range across complementary businesses, a strong brand and operational flexibility.”IFAonline
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