26th Apr 2006 07:01
Legal & General Group PLC26 April 2006 LEGAL & GENERAL GROUP PLC NEW BUSINESS RESULTS FOR THE 3 MONTHS TO 31 MARCH 2006 Stock Exchange Release26 April 2006 Continued momentum - strong market environment • Strong UK market growth • Legal & General outperforms again o UK new business up 28% to £363m APE o Worldwide new business up 27% to £390m APE • £5.6bn new institutional funds under management Group Chief Executive, Tim Breedon, said: "Legal & General Group's first quarter 2006 new business results show continuednew business momentum, reflecting the strength of the protection, savings andinvestment markets in the UK and of our position within them. In particular, our partnership with Cofunds, the investment fund platform, andour many long-standing Bank and Building Society relationships, are playing animportant role in driving our business forward. UK new business was up 28% in the first quarter of this year. We saw goodperformance in retail protection sales as the housing market showed furthersigns of recovery. There was increased activity in the retail pensions market,with customers and advisers preparing for changes in pensions legislation. Ourinvestment bond business rose 39% with intermediaries taking advantage of theopportunities available to them and to their customers through wrap platformsand our newly launched multi-fund Portfolio Bond. In retail investments, ISAand unit trust sales saw impressive growth, as consumers drew confidence fromimproved equity markets. Legal & General Investment Management delivered £5.6bn of new funds undermanagement - yet another quarter of outstanding performance. This is a strong start to the year. We remain confident in our ability tocontinue delivering profitable growth." New business APE(1) (£m) Q1 2006 Q1 2005 % change_______________________________________________________________________________________________UK life and pensions 239 208 15International life and pensions 27 24 13_______________________________________________________________________________________________Total life and pensions 266 232 15_______________________________________________________________________________________________UK retail investments 124 75 65_______________________________________________________________________________________________Worldwide total 390 307 27_______________________________________________________________________________________________Investment management £5.6bn £3.4bn 63_______________________________________________________________________________________________1. Annual Premium Equivalent (APE) = total new annual premiums plus 10% of single premiums, including ISAs and unit trusts UK life and pensions - Q1 up 15% to £239m APENew business APE (£m) Q1 2006 Q1 2005 % change_______________________________________________________________________________________________Protection 56 54 4Annuities 33 44 (25)Savings:- Unit linked bonds 61 44 39- Pensions - Stakeholder and other non profit 41 31 32With-profits 48 35 37_______________________________________________________________________________________________Total UK life and pensions 239 208 15_______________________________________________________________________________________________ Protection - Q1 up 4% to £56m APE The recovery in mortgage application volumes experienced towards the end of 2005has fed through to improved protection sales in Q1 2006. Sales of annualpremium mortgage related protection business increased by 30% to £26m (Q1 2005:£20m). Other retail protection business was broadly in line with the samequarter last year at £13m (Q1 2005: £12m). Group risk new annual premiums fell from £22m in Q1 2005 to £17m in Q1 2006.2004 and 2005 volumes in this segment benefited from the withdrawal of acompetitor at the end of 2003. In addition, market activity was lower in thefirst quarter 2006 as intermediaries and their customers focused on preparationsfor A-Day. We believe this reduced volume of new business represents a moresustainable level going forward, albeit double the average level of quarterlysales in this segment achieved by Legal & General in 2003. Annuities - Q1 down 25% to £33m APE At £56m, single premium sales of non profit individual annuities were 68% lowerthan Q1 2005 (£174m) and 23% below Q4 2005 (£73m). Competitive pricing has beena feature of this market over the last nine months. We remain comfortableseeing a lower market share whilst the available returns do not meet our profitrequirements. Comparisons against performance in the first half of 2005 will,therefore, remain challenging. At £277m, sales of single premium bulk purchase annuities were 5% above Q1 2005(£264m). This included one medium-sized scheme of over £100m, with other newbusiness driven by smaller cases. Quotation volumes remain strong. Savings: Unit linked bonds - Q1 up 39% to £61m APE Sales of single premium unit linked bonds rose by 39% to £605m (Q1 2005: £434m),continuing the trend of strong growth seen throughout 2005. In Q1 2006, webenefited from the launch of our multi-fund bond to IFAs using the platformdeveloped with Cofunds and we anticipate this will provide increasing volumes ofnew business going forward. Savings: Pensions - Q1 up 32% to £41m APE Pensions volumes grew by 32% over the quarter to £41m APE (Q1 2005: £31m APE),due to good growth in employer related pensions business and increased levels oftransfer activity in the run-up to pensions A-Day on 6 April. New annualpremium pensions business increased by 42% in Q1 to £27m (Q1 2005: £19m) andsingle premium new business grew by 15% to £142m (Q1 2005: £124m). With-profits - Q1 up 37% to £48m APE New business from with-profits individual pensions increased by 52% to £41m APE(Q1 2005: £27m APE), owing mainly to an increase in pensions transfer activityahead of pensions A-Day. With-profits bond sales continued to decline to £21m(Q1 2005: £57m). International life and pensions - Q1 up 13% to £27m APE In our US operations, new business of $19m APE was in line with Q1 2005 ($19mAPE). Returns in sterling terms of £11m APE (Q1 2005: £10m APE) reflected astrengthened dollar. Our businesses in the Netherlands and France continued to show good growth. Newbusiness increased to €14m APE (Q1 2005: €12m APE) in the Netherlands and to€10m APE (Q1 2005: €8m APE) in France, driven by strong single premium savingsbusiness. Overall, new business from our overseas operations in sterling terms increasedby 13% from £24m to £27m of APE. Retail investments - Q1 up 65% to £124m APE New retail investments business increased by 65% to £124m APE (Q1 2005: £75mAPE) as investor confidence in equity markets continued to improve. Sales ofsingle payment ISAs were up 25% to £105m (Q1 2005: £84m) and single payment unittrust new business grew 72% to £1,090m (Q1 2005: £634m). Demand was strong fromboth retail and institutional customers. Investment management - Q1 up 63% to £5.6bn Institutional new business volumes continue to grow strongly, increasing by£2.2bn, or 63%, to £5.6bn in Q1 2006 (Q1 2005: £3.4bn). We continued to attract an average of over £1bn per month of new business frompension fund clients and we saw significant growth also from non-pension fundinstitutions. Outlook We expect further market growth in the investment, savings and protectionmarkets throughout 2006 and believe Legal & General is well placed tocapitalise on these opportunities. Our relationship with Cofunds is alreadybearing fruit and we expect that the advantages of this technology will becomeincreasingly valued by both customers and intermediaries. New products have beenlaunched, such as a Self Invested Personal Pension product on the Cofundsplatform and a pension term assurance product, and we expect furtherdevelopments later this year. Mortgage transaction volumes are increasing andassociated protection sales are expected to continue to grow. We are confident that, with our broad product range and distribution strength,Legal & General will continue to deliver strong results throughout 2006. Enquiries to: Investors: Peter Horsman, Head of Investor Relations 020 7528 6362 Jonathan Maddock, Head of Investor Relations 020 7528 6298 Nicola Marshall, Investor Relations Manager 020 7528 6263________________________________________________________________________________ Media: John Morgan, Media Relations Director 020 7528 6213 Anthony Carlisle, Citigate Dewe Rogerson 07973 611888________________________________________________________________________________ Notes: •A copy of this announcement can be found in the News and Results section of our shareholder web site at http://investor.legalandgeneral.com/releases.cfm •Issued share capital at 31 December 2005 was 6,507,421,932 shares of 2.5p each. Financial Calendar 2006: ________________________________________________________________________________Annual General Meeting 18 May________________________________________________________________________________Payment of 2005 final dividend 22 May________________________________________________________________________________Interim results and second quarter new business 27 July________________________________________________________________________________Ex-dividend date for interim dividend 6 September________________________________________________________________________________Record date for interim dividend 8 September________________________________________________________________________________Payment date for interim dividend 2 October________________________________________________________________________________Third quarter new business results 18 October________________________________________________________________________________ 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.By their nature forward-looking statements involve risk and uncertainty becausethey relate to future events and circumstances which are beyond Legal & GeneralGroup's control, including, among others, UK domestic and global economic andbusiness conditions, market related risks such as fluctuations in interest ratesand exchange rates, the policies and actions of regulatory authorities, theimpact of competition and the policies and actions of governmental andregulatory authorities, the timing impact and other uncertainties of futureacquisition or combinations within relevant industries. As a result, Legal &General Group's actual future condition, performance and results may differmaterially from the plans, goals and expectations set out in Legal & GeneralGroup's forward-looking statements. Legal & General Group Plc does notundertake to update forward-looking statements contained in this document or anyother forward-looking statement it may make. Legal & General Group PlcUnaudited New Business PremiumsThree months to 31 March 2006 WORLDWIDE NEW BUSINESS Three months to 31 March 2006 Three months to 31 March 2005 Annual Single APE Annual Single APE Increase/ premiums premiums premiums premiums (decrease) £m £m £m £m £m £m %______________________________________________________________________________________________________________UK life and pensions business- Protection 56 - 56 54 - 54 4- Annuities - 333 33 - 438 44 (25)- Savings - Unit linked bonds - 605 61 - 434 44 39 - Pensions - Stakeholder and other 27 142 41 19 124 31 32 non profit- With-profits 29 190 48 19 160 35 37______________________________________________________________________________________________________________Total UK life and pensions business 112 1,270 239 92 1,156 208 15 International life and pensions business- USA 11 - 11 10 - 10 10- Netherlands 3 59 9 4 46 8 13- France 1 59 7 1 47 6 17______________________________________________________________________________________________________________Total international life and pensions 15 118 27 15 93 24 13business UK retail investment business 4 1,195 124 3 718 75 65France retail investment business - 5 - - 5 - N/A______________________________________________________________________________________________________________Total retail investment business 4 1,200 124 3 723 75 65______________________________________________________________________________________________________________Worldwide new business 131 2,588 390 110 1,972 307 27______________________________________________________________________________________________________________ WORLDWIDE NEW BUSINESS QUARTERLY PROGRESSION 3 months 3 months 3 months 3 months 3 months to to to to to 31.03.06 31.12.05 30.09.05 30.06.05 31.03.05______________________________________________________________________________________________________________UK life and pensions business- Protection 56 46 54 54 54- Annuities 33 40 35 35 44- Savings - Unit linked bonds 61 60 54 50 44 - Pensions - Stakeholder and other non profit 41 39 40 42 31- With-profits 48 40 37 38 35______________________________________________________________________________________________________________Total UK life and pensions business 239 225 220 219 208 International life and pensions business- USA 11 12 11 9 10- Netherlands 9 7 8 6 8- France 7 6 8 16 6______________________________________________________________________________________________________________Total international life and pensions business 27 25 27 31 24 UK retail investment business 124 67 79 94 75France retail investment business - - 1 1 -______________________________________________________________________________________________________________Total retail investment business 124 67 80 95 75______________________________________________________________________________________________________________Worldwide new business APE 390 317 327 345 307______________________________________________________________________________________________________________ Legal & General Group PlcUnaudited New Business PremiumsThree months to 31 March 2006 UK LIFE AND PENSIONS NEW BUSINESS Three months to 31 March 2006 Three months to 31 March 2005 Annual Single APE Annual Single APE Increase/ premiums premiums premiums premiums (decrease) £m £m £m £m £m £m %______________________________________________________________________________________________________________Protection- Mortgage related 26 - 26 20 - 20 30- Other 13 - 13 12 - 12 8- Group risk 17 - 17 22 - 22 (23)______________________________________________________________________________________________________________Annuities- Individual - 56 5 - 174 17 (71)- Bulk purchase - 277 28 - 264 27 4______________________________________________________________________________________________________________Savings- Unit linked bonds - 605 61 - 434 44 39- Individual pensions 27 142 41 19 124 31 32______________________________________________________________________________________________________________With-profits- Annuities - 20 2 - 9 1 100- Individual pensions 28 131 41 18 88 27 52- DWP rebates - 17 2 - 5 - N/A- Group pensions 1 1 1 1 1 1 -- Bonds - 21 2 - 57 6 (67)______________________________________________________________________________________________________________Total UK life and pensions business 112 1,270 239 92 1,156 208 15______________________________________________________________________________________________________________ INVESTMENT MANAGEMENT Three months to 31 Increase/ March 2006 2005 (decrease) £m £m %UK Managed Funds- Pooled funds 3,763 3,314 14- Segregated funds 61 42 45______________________________________________________________________________________________________________ 3,824 3,356 14 UK Other 1,739 57 2,951______________________________________________________________________________________________________________Total new funds 5,563 3,413 63______________________________________________________________________________________________________________ Legal & General Group PlcUnaudited New Business PremiumsThree months to 31 March 2006 INTERNATIONAL OPERATIONS IN LOCAL CURRENCY Three months to 31 March 2006 Three months to 31 March 2005 Increase/ Annual Single APE Annual Single APE (decrease) premiums premiums premiums premiums %______________________________________________________________________________________________________________USA ($m): 19 - 19 19 - 19 - Netherlands (•m): 5 86 14 5 66 12 17 France (•m): - Life and pensions 1 86 10 1 68 8 25 - Unit trusts - 7 - - 6 - N/A______________________________________________________________________________________________________________ UK RETAIL BUSINESS APE BY CHANNEL Three months to 31 March 2006 Annual Single Total APE % of £m £m £m total______________________________________________________________________________________________________________Independent financial advisers 65 157 222 70Tied 29 56 85 27Direct 4 6 10 3______________________________________________________________________________________________________________Total 98 219 317 100______________________________________________________________________________________________________________ Three months to 31 March 2005 Annual Single Total APE % of £m £m £m total______________________________________________________________________________________________________________Independent financial advisers 48 89 137 59Tied 21 66 87 37Direct 3 6 9 4______________________________________________________________________________________________________________Total 72 161 233 100______________________________________________________________________________________________________________ Legal & General Group PlcUnaudited New Business PremiumsThree months to 31 March 2006 UK NEW BUSINESS Three months to 31 Increase/ March 2006 2005 (decrease) £m £m %______________________________________________________________________________________________________________UK INDIVIDUAL LIFE AND PENSIONS BUSINESS New annual premiumsLife:- Mortgage related 26 20 30- Protection 13 12 8Pensions:- Individual pensions - non profit 27 19 42- Individual pensions - with-profits 28 18 56______________________________________________________________________________________________________________Total new annual premiums 94 69 36 Single premiumsLife:- With-profits 21 57 (63)- Unit-linked 605 434 39Pensions:- Individual pensions - non profit 142 124 15- Individual pensions - with-profits 131 88 49- Individual annuities - non profit 56 174 (68)- Individual annuities - with-profits 20 9 122- DWP rebates 17 5 240______________________________________________________________________________________________________________Total single premiums 992 891 11______________________________________________________________________________________________________________Individual life and pensions total APE 193 158 22______________________________________________________________________________________________________________ UK RETAIL INVESTMENTS New annual premiums- ISAs/PEPs 3 3 -- Unit trusts 1 - N/A______________________________________________________________________________________________________________Total new annual premiums 4 3 33 Single premiums- ISAs/PEPs 105 84 25- Unit trusts 1,090 634 72______________________________________________________________________________________________________________Total single premiums 1,195 718 66______________________________________________________________________________________________________________UK retail investments total APE 124 75 65______________________________________________________________________________________________________________UK retail business total APE 317 233 36______________________________________________________________________________________________________________ UK CORPORATE LIFE AND PENSIONS BUSINESS New annual premiums- Group risk 17 22 (23)- Group pensions 1 1 -______________________________________________________________________________________________________________Total new annual premiums 18 23 (22) Single premiums- Bulk purchase annuities 277 264 5- Other group business 1 1 -______________________________________________________________________________________________________________Total single premiums 278 265 5______________________________________________________________________________________________________________UK corporate life and pensions APE 46 50 (8)______________________________________________________________________________________________________________UK business total APE 363 283 28______________________________________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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