26th Apr 2007 07:01
Legal & General Group PLC26 April 2007 Legal & General Group Plc 26 April 2007 - Stock Exchange release Q1 2007 New business results Highlights: • UK new life and pensions up 27% to £303m APE(1) • Worldwide new business increased by 6% to £413m APE • £5bn of new investment management business Tim Breedon, Group Chief Executive, said: "Legal & General has made a good start to 2007 with quarterly new UK life andpensions volumes up 27% to £303m APE. This represents 13 quarters ofuninterrupted growth in the company's core UK business at an annualised compoundaverage growth rate of over 20%. Overall the Group's worldwide new business rose6% over the corresponding period last year. "Underlying retail demand for our ISA and unit trust products was broadly inline with the same period last year. However, overall unit trust sales werelower than the first quarter of 2006 when the company benefited from higherinflows of institutional business. "Legal & General continues to extend its distribution reach having secured anagreement with Nationwide, the UK's largest building society, to supplyprotection, investment and pension products. A similar arrangement withIntelligent Finance to become their sole provider of non advised life insuranceproducts is announced today. Both arrangements will begin to contribute to salesin the second half of the year. "In addition to extending our distribution, we continue to broaden our productrange with the launch of innovative group SIPP and protection products. Webelieve the fundamentals for the UK economy continue to be positive for 2007. Wetherefore remain confident of further profitable growth given the favourableclimate for our business." (1) 'Annual Premium Equivalent' comprises new annual premiums together with 10% of single premiums UK new business - up 6% to £383m APE Protection - stable at £56m APE In individual protection, new business grew by 8% to £42m APE (Q1 06: £39m APE).With our commitment to quality of service, good value products and extendingdistribution reach, we expect to continue building our market-leading positionduring 2007. We look forward to the launch of our partnerships with NationwideBuilding Society and Intelligent Finance in the second half of the year. Group protection new business fell by 18% to £14m APE (Q1 06: £17m APE) in asubdued market, where advisors and customers remained focused on issuessurrounding Pensions A-Day and the new Age Discrimination legislation. Annuities(2) - up 27% to £42m APE Sales of individual annuities increased to £25m APE in Q1 07 (Q1 06: £5m APE),in a more favourable environment. In the bulk purchase annuities market, Legal& General won 45 policies in the first quarter of 2007 with an average size ofunder £4m single premium and amounting to £17m APE (Q1 06: £28m APE). Thetiming of scheme completions remains unpredictable and fewer completed in thefirst quarter of the year. We saw increased competition for medium and largesized schemes compared to the first quarter of 2006. In total, volumes of newannuities business increased by 27% to £42m APE (Q1 06: £33m APE). Unit linked bonds(2) - up 21% to £74m APE New unit linked bond business grew by 21% to £74m APE in the first quarter of2007 (Q1 06: £61m APE), driven mainly by the ongoing success of our PortfolioBond. An additional unit allocation promotion for Portfolio Bond customers waslaunched in 2006 and enhanced in the second half of the year. This continued inthe first quarter of 2007, although the additional allocation was set at a lowerlevel. Pensions(2) - up 68% to £69m APE The changes to pensions legislation implemented in April 2006 - the A-Dayreforms - continued to provide a stimulus to the pensions market in the firstquarter of 2007. New non profit pensions business grew by 68% to £69m APE (Q106: £41m APE). Including both with-profits and non profit business, pensionssales increased by 48% to £126m APE (Q1 06: £85m APE). We maintained ourtargeted approach to growth, focusing on pensions transfers and corporateschemes. Sales of our SIPP product continued to grow, with nearly two thirds ofnew business written on platform during the quarter. With-profits - up 29% to £62m APE With-profits new business increased to £62m APE (Q1 06: £48m APE), reflectingstrong growth in pensions sales as mentioned above. As in previous periods,these figures include unit linked contracts with a with-profits option. Retail investments - down 35% to £80m APE Retail investment product sales were £80m APE in Q1 07 (Q1 06: £124m APE), whichincluded £32m APE of institutional and wholesale business (Q1 06: £75m APE).Single premium sales of ISAs and PEPs grew by 5% to £110m (Q1 06: £105m). (2) Business not written in the with-profits part of the fund International new business - up 11% to £30m APE Total international sales grew by 11% in sterling terms to £30m APE (Q1 06: £27mAPE). In France, new business increased by 70% in local currency terms to €17mAPE (Q1 06: €10m APE), mainly as a result of strong growth in sales of savingsproducts and unit trusts. In the Netherlands, sales fell by 14% to €12m APE (Q106: €14m APE) while in the USA, volumes grew by 11% to $21m APE (Q1 06: $19mAPE). Investment management - new business of £5bn Legal & General Investment Management continued its impressive track record inthe first quarter of 2007 with £5.1bn of new business received (Q1 06: £5.6bn).At 31 March 2007, total funds under management stood at £240bn (31 December2006: £233bn). Outlook We remain confident in the fundamentals of the UK economy for 2007 and in thepotential for the UK's savings, protection and investment markets. We believe Pensions A-Day and open architecture developments will continue toprovide a stimulus to the savings market. In bulk purchase annuities, we remainconfident that our experience and expertise in pricing, administration andinvestment, combined with our financial strength, will enable Legal & General tobuild on its strong position in this segment - one which has the potential forsignificant further growth. Further possible rises in interest rates, together with the removal of pensionsterm assurance, may impact growth in the individual protection market. However,we expect to strengthen our already market-leading position with newdistribution agreements launching later in the year. We believe Legal & General has a compelling position in the UK, with the productrange, distribution, flexibility and commitment to quality of service needed toachieve further success. Enquiries to: Investors: Jonathan Maddock, Head of Investor Relations 020 7528 6298Nicola Marshall, Investor Relations Manager 020 7528 6263 Media: John Morgan, Media Relations Director 020 7528 6213Anthony Carlisle, Citigate Dewe Rogerson 07973 611888 Notes: A copy of this announcement can be found under "Financial information" in the "News releases" section of our shareholder web site at http://investor.legalandgeneral.com/releases.cfm Issued share capital at 31 March 2007 was 6,532,744,100 shares of 2.5p each. Financial Calendar: Annual General Meeting 16 May 2007Banks and Building Societies seminar 5 June 20072007 Interim results and Q2 2007 New business results 26 July 2007Q3 2007 New business results 17 October 2007Q4 2007 New business results 24 January 2008 Forward-looking statements: This document may contain certain forward-looking statements with respect tocertain of Legal & General Group Plc's plans and its current goals andexpectations relating to future financial condition, performance and results. Bytheir nature forward-looking statements involve risk and uncertainty becausethey relate to future events and circumstances which are beyond Legal & GeneralGroup Plc's control, including, among others, UK domestic and global economicand business conditions, market related risks such as fluctuations in interestrates and exchange rates, the policies and actions of governmental andregulatory authorities, the impact of competition, the timing impact and otheruncertainties of future mergers or combinations within relevant industries. As aresult, Legal & General Group Plc's actual future condition, performance andresults may differ materially from the plans, goals and expectations set out inLegal & General Group Plc's forward-looking statements. Legal & General GroupPlc does not undertake to update forward-looking statements contained in thisdocument or any other forward-looking statement it may make. Legal & General Group PlcUnaudited New Business PremiumsThree months to 31 March 2007 WORLDWIDE NEW BUSINESS Three months to 31 March 2007 Three months to 31 March 2006 Annual Single APE Annual Single APE Increase/ premiums premiums premiums premiums (decrease) £m £m £m £m £m £m %_____________________________________________________________________________________________________________________Protection- Individual protection 42 - 42 39 - 39 8%- Group protection 14 - 14 17 - 17 (18%)_____________________________________________________________________________________________________________________ 56 - 56 56 - 56 0%Annuities- Individual - 253 25 - 56 5 400%- Bulk purchase - 165 17 - 277 28 (39%)_____________________________________________________________________________________________________________________ - 418 42 - 333 33 27%Savings- Unit linked bonds - 739 74 - 605 61 21%- Individual pensions - stakeholder and other non profit 43 251 68 27 142 41 66%- DWP rebates - 11 1 - - - N/A_____________________________________________________________________________________________________________________ 43 1,001 143 27 747 102 40%With-profits- Annuities - 18 2 - 20 2 0%- Individual pensions 34 223 56 28 131 41 37%- DWP rebates - - - - 17 2 (100%)- Group pensions 1 1 1 1 1 1 0%- Bonds - 26 3 - 21 2 50%_____________________________________________________________________________________________________________________ 35 268 62 29 190 48 29%_____________________________________________________________________________________________________________________ 134 1,687 303 112 1,270 239 27% UK retail investment business- Unit trusts 2 638 66 1 1,090 110 (40%)- ISAs 3 110 14 3 105 14 0% 5 748 80 4 1,195 124 (35%)_____________________________________________________________________________________________________________________ _____________________________________________________________________________________________________________________Total UK new business 139 2,435 383 116 2,465 363 6%_____________________________________________________________________________________________________________________ - USA 11 - 11 11 - 11 0%- Netherlands 3 56 8 3 59 9 (11%)- France 2 78 10 1 59 7 43%_____________________________________________________________________________________________________________________ 16 134 29 15 118 27 7% France retail investment business - 6 1 - 5 - N/A _____________________________________________________________________________________________________________________Total international new business 16 140 30 15 123 27 11%_____________________________________________________________________________________________________________________ Total worldwide new business 155 2,575 413 131 2,588 390 6%_____________________________________________________________________________________________________________________ Legal & General Group PlcUnaudited New Business PremiumsThree months to 31 March 2007 WORLDWIDE NEW BUSINESS APE QUARTERLY PROGRESSION 3 months 3 months 3 months 3 months 3 months to to to to to 31.03.07 31.12.06 30.09.06 30.06.06 31.03.06 £m £m £m £m £m______________________________________________________________________________________________________________________Protection- Individual protection 42 45 44 39 39- Group protection 14 14 17 16 17______________________________________________________________________________________________________________________ 56 59 61 55 56Annuities- Individual 25 24 26 16 5- Bulk purchase 17 29 24 22 28______________________________________________________________________________________________________________________ 42 53 50 38 33Savings- Unit linked bonds 74 80 60 60 61- Individual pensions - stakeholder and other non profit 68 59 55 52 41- DWP rebates 1 1 - - -______________________________________________________________________________________________________________________ 143 140 115 112 102With-profits- Annuities 2 1 3 2 2- Individual pensions 56 36 42 46 41- DWP rebates - 2 10 2 2- Group pensions 1 - 1 - 1- Bonds 3 2 2 2 2______________________________________________________________________________________________________________________ 62 41 58 52 48______________________________________________________________________________________________________________________ 303 293 284 257 239 UK retail investment business- Unit trusts 66 217 78 191 110- ISAs 14 14 13 27 14______________________________________________________________________________________________________________________ 80 231 91 218 124 ______________________________________________________________________________________________________________________Total UK new business 383 524 375 475 363______________________________________________________________________________________________________________________ - USA 11 10 11 10 11- Netherlands 8 7 6 7 9- France 10 7 5 13 7______________________________________________________________________________________________________________________ 29 24 22 30 27 France retail investment business 1 - 1 1 - ______________________________________________________________________________________________________________________Total international new business 30 24 23 31 27______________________________________________________________________________________________________________________ Total worldwide new business 413 548 398 506 390______________________________________________________________________________________________________________________ Legal & General Group PlcUnaudited New Business PremiumsThree months to 31 March 2007 INVESTMENT MANAGEMENT Three months to 31 Increase/ March (decrease) 2007 2006 £m £m %______________________________________________________________________________________________________________________UK Managed Funds- Pooled funds 4,922 3,763 31%- Segregated funds 68 61 11%______________________________________________________________________________________________________________________ 4,990 3,824 30% UK Other 69 1,739 (96%) ______________________________________________________________________________________________________________________Total new funds 5,059 5,563 (9%)______________________________________________________________________________________________________________________ INVESTMENT MANAGEMENT QUARTERLY PROGRESSION 3 months 3 months 3 months 3 months 3 months to to to to to 31.03.07 31.12.06 30.09.06 30.06.06 31.03.06 £m £m £m £m £m______________________________________________________________________________________________________________________UK Managed Funds- Pooled funds 4,922 5,801 3,814 4,500 3,763- Segregated funds 68 1 8 538 61______________________________________________________________________________________________________________________ 4,990 5,802 3,822 5,038 3,824 UK Other 69 159 109 157 1,739 ______________________________________________________________________________________________________________________Total new funds 5,059 5,961 3,931 5,195 5,563______________________________________________________________________________________________________________________ INTERNATIONAL OPERATIONS IN LOCAL CURRENCY Three months to 31 March 2007 Three months to 31 March 2006 Increase/ Annual Single APE Annual Single APE (decrease) premiums premiums premiums premiums %______________________________________________________________________________________________________________________USA ($m): 21 - 21 19 - 19 11% Netherlands (•m): 4 83 12 5 86 14 (14%) France (•m): - Life and pensions 4 116 16 1 86 10 60% - Unit trusts - 9 1 - 7 - N/A______________________________________________________________________________________________________________________ UK INDIVIDUAL APE BY CHANNEL Three months to 31 March 2007 Annual Single Total APE % of £m £m £m total______________________________________________________________________________________________________________________Independent financial advisers 95 1,503 245 70%Tied 25 709 96 27%Direct 4 57 10 3%______________________________________________________________________________________________________________________Total 124 2,269 351 100%______________________________________________________________________________________________________________________ Three months to 31 March 2006 Annual Single Total APE % of £m £m £m total______________________________________________________________________________________________________________________Independent financial advisers 65 1,565 222 70%Tied 29 558 85 27%Direct 4 64 10 3%______________________________________________________________________________________________________________________Total 98 2,187 317 100%______________________________________________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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