20th Oct 2005 07:00
Legal & General Group PLC20 October 2005 20 October 2005 LEGAL & GENERAL GROUP PLC ========================= NEW BUSINESS RESULTS FOR THE NINE MONTHS TO 30 SEPTEMBER 2005 ============================================================= HIGHLIGHTS €36% growth in UK new business in the third quarter •UK individual business market share over 11% at the half year •Legal & General Investment Management funds up 15% to £187bn, with over £10bn of new business New business APE(1) (£m) Nine % Three % months to change on months to change on 30/09/05 2004 30/09/05 2004 -------- -------- -------- -------- UK individual business- life and pensions 529 19 180 8- retail investments 248 71 78 160 -------- -------- -------- --------UK individual business total 777 32 258 31 -------- -------- -------- -------- UK group life and pensions 118 39 42 75 -------- -------- -------- --------UK total 895 33 300 36 -------- -------- -------- -------- International 84 (1) 27 (4) -------- -------- -------- --------Worldwide total 979 29 327 31 -------- -------- -------- -------- Institutional fund management £10.2bn £3.3bn Group Chief Executive, Sir David Prosser, said: "Legal & General has once again demonstrated its strength in the UK andcontinues to outperform. Total UK individual business has grown by 31% on the same quarter last year,with particularly strong pensions, unit-linked bonds and unit trust sales. Weincreased our market share to 11.3% in the first half, up almost two percentagepoints from 9.4% in the first half of 2004 and Legal & General InvestmentManagement has continued its outstanding record of delivering an average of£1 billion of new business per month. The strength and flexibility of our distribution network, underpinned by marketleading technologies, remains a key differentiator. We are particularly pleasedboth with the progress of our many long-standing bank and building societypartnerships and our growing position in the IFA market. Chelsea BuildingSociety's announcement today further illustrates the former, with the extensionof its existing general insurance relationship with Legal & General to includethe sale of our life assurance products - all through our on-line protectiontechnology. Our focus on customers and value for money products, our powerful distributionnetwork and well-recognised brand will enable Legal & General to benefit fromfurther opportunities in the UK market." Notes1 Annual Premium Equivalent (APE) is total new annual premiums + 10% of singlepremiums, including ISAs and unit trusts. UK== Individual life protection business - Q3 down 14% to £36m APE-------------------------------------------------------------Sales of annual premium mortgage related protection business have increasedquarter by quarter in the year-to-date to £24m APE in the third quarter.Compared to the third quarter last year (Q3 2004: £29m APE), however, sales were17% lower, reflecting a slower housing market and a higher level of competitiveactivity over the first half of 2005. Other protection business was broadlyunchanged at £12m APE (Q3 2004: £13m APE). We continue to invest in e-technologyand on-line protection processes and expect to maintain our market-leadingposition in the life protection segment. Individual life savings business - Q3 up 29% to £58m APE--------------------------------------------------------The strong growth in our sales of unit-linked bond products, already highlightedin the first half results, continued in the third quarter. Volumes rose 51% onthe corresponding quarter last year, driving year-to-date sales to £1,483m(2004: £956m), an increase of 55%. We are particularly pleased with initialsales of Legal & General's flexible multi-fund bond distributed to Bradford &Bingley customers using Cofunds technology. Volumes of with-profits bond salescontinued to decline in the third quarter to £35m (Q3 2004: £86m). Individual pensions - Q3 up 38% to £72m APE-------------------------------------------Individual pensions business continued to grow apace. Annual premiums increasedby 34% to £43m APE (Q3 2004: £32m APE) and single premium new business grew by43% to £285m (Q3 2004: £200m), as we continue to benefit from strong growth inthe pensions transfer market ahead of Pensions A-day in April next year. Our newSelf Invested Pension Plan product was launched in August, giving customers theflexibility to invest initially in unit-linked funds and subsequently in assetsof their choice. Individual annuities - Q3 down 46% to £15m APE----------------------------------------------Increased competition in this area and a tough prior year comparator has led toa decrease in volumes in the third quarter of this year. Our requirement tomaintain suitable levels of profitability by keeping to strict return on capitaltargets means that volume flow in this area is more volatile. Over theyear-to-date, however, volumes remain broadly similar at £630m (2004: £647m). ISAs and Unit trusts - Q3 up 160% to £78m APE---------------------------------------------Single premium unit trusts sales more than trebled to £697m (Q3 2004: £212m) andsales of single premium ISAs increased by 40% to £67m (Q3 2004: £48m). Stronginstitutional sales were the main driver behind the increase in volumes,accounting for £36m APE of the £78m APE of new business. Group business - Q3 up 75% to £42m APE--------------------------------------Single premiums for bulk purchase annuity business nearly doubled to £220m (Q32004: £120m). Group risk new annual premiums showed an increase of over 60% to£18m APE (Q3 2004: £11m APE), as we continue to benefit from the withdrawal in2004 of a major competitor. International============= Total international new business remained broadly unchanged at £27m APE (Q32004: £28m APE). In local terms, new business volumes in the Netherlands of €11mAPE (Q3 2004: €9m APE) and in France of €12m APE (Q3 2004: €10m APE) are up 22%and 20% respectively, driven by improved single premium sales. In the USA,difficult trading conditions in the brokerage market have resulted in a 27%reduction in new business to $19m APE (Q3 2004: $26m APE), however management isworking to broaden distribution within the existing business model. Legal & General Investment Management===================================== Legal & General Investment Management has maintained its remarkable record ofaveraging £1bn of new business per month. Total funds under management now standat £187bn (31 Dec 2004: £162bn). We have continued to expand our businesssourced overseas, where funds under management now exceed £2bn (31 Dec 2004:£1bn). New draft tax legislation========================= We continue to seek clarification of the impact of the draft tax legislationannounced by the Economic Secretary to the Treasury on 29 September but, as of19 October, we are unable to provide any update on our earlier announcement,issued on 4 October. HM Treasury has commented that "Any suggestion that theindustry will be hit with a bill of £500m is wide of the mark by a factor of10". OUTLOOK======= We expect our brand, product and distribution strengths will continue to enableus to expand our position in the UK market. We are pleased with the progress ofour bancassurance partnerships and, at the same time, we are continuing to growour share of the IFA market. The distribution of our products using the Cofundsplatform continues. Using this platform, we will be conducting a pilot programmeamong selected IFAs of Legal & General's single premium bond. We expect to rollthe programme out to the whole of the IFA channel in the New Year. Recent trends, as evidenced through our Mortgage Club, indicate that the periodof declining activity in housing transactions may be coming to an end andtherefore we expect mortgage protection volumes to begin to show signs ofimprovement. In pensions, we expect market activity to continue to be stimulated by theapproach of A-Day. We also believe the forthcoming second report of the PensionsCommission will heavily influence the pensions landscape for the next decade andbeyond. In this and our other product areas, we expect the natural beneficiariesof efforts to stimulate savings to be those institutions, such as Legal &General, with strong brands, efficient investment and transaction capabilities,and good value products. -------------------------------------------------------------------------------- Enquiries to: Investors:Andrew Palmer, Group Director (Finance) 020 7528 6286Peter Horsman, Head of Investor Relations 020 7528 6362Nicola 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 in the News and Results section of ourShareholder site at http://investor.legalandgeneral.com/releases.cfm Financial Calendar: 26 January 2006 2005 Full year new business results17 March 2006 2005 Preliminary results26 April 2006 First quarter new business results18 May 2006 Annual General Meeting27 July 2006 Interim results18 October 2006 Third quarter new business results LEGAL & GENERAL GROUP PLCUNAUDITED NEW BUSINESS PREMIUMSNINE MONTHS TO 30 SEPTEMBER 2005 NEW UK BUSINESS Nine months to Three months to 30 September inc/ 30 September inc/ 2005 2004 (dec) 2005 2004 (dec) £m £m % £m £m % INDIVIDUAL LIFE AND PENSIONS BUSINESS New annual premiumsLife:- Mortgage related 67 82 24 29- Protection 36 38 12 13Pensions:- Individual pensions 126 93 43 32 ------- ------- ------ ------- ------- ------Total new annual premiums 229 213 8 79 74 7 Single premiumsLife:- With-profits 137 310 35 86- Unit-linked 1,483 956 543 359Pensions:- Individual pensions 707 302 247 124- Annuities - individual 630 647 149 280- DWP rebates 45 93 38 76 ------- ------- ------ ------- ------- ------Total single premiums 3,002 2,308 30 1,012 925 9 Individual life ------- ------- ------ ------- ------- ------ and pensions APE 529 444 19 180 167 8 ======= ======= ====== ======= ======= ====== ISAS, PEPS AND UNIT TRUSTS New annual premiums- ISAs/PEPs (excluding cash ISAs) 11 17 2 4- Unit trusts 1 1 0 0 ------- ------- ------ ------- ------- ------Total new annual premiums 12 18 (33) 2 4 (50) Single premiums- ISAs/PEPs (excluding cash ISAs) 356 437 67 48- Unit trusts 2,001 833 697 212 ------- ------- ------ ------- ------- ------Total single premiums 2,357 1,270 86 764 260 194 ISAs, PEPs and ------- ------- ------ ------- ------- ------ unit trusts APE 248 145 71 78 30 160 ======= ======= ====== ======= ======= ====== Total individual ------- ------- ------ ------- ------- ------ business APE 777 589 32 258 197 31 ======= ======= ====== ======= ======= ====== GROUP LIFE AND PENSIONS BUSINESS New annual premiums- Group risk 59 47 18 11- Group pensions 4 3 2 1 ------- ------- ------ ------- ------- ------Total new annual premiums 63 50 26 20 12 67 Single premiums- Annuities - bulk purchase 549 350 220 120- Other group business 5 4 1 2 ------- ------- ------ ------- ------- ------Total single premiums 554 354 56 221 122 81 Group life ------- ------- ------ ------- ------- ------ and pensions APE 118 85 39 42 24 75 ------- ------- ------ ------- ------- ------Total UK APE 895 674 33 300 221 36 ======= ======= ====== ======= ======= ====== INSTITUTIONAL FUND MANAGEMENT UK Managed Funds- Pooled funds 9,649 9,699 2,939 2,089- Segregated funds 146 1,143 41 80 ------- ------- ------ ------- ------- ------ 9,795 10,842 (10) 2,980 2,169 37 UK Other 411 301 351 231 ------- ------- ------ ------- ------- ------ 10,206 11,143 (8) 3,331 2,400 39 ======= ======= ====== ======= ======= ====== LEGAL & GENERAL GROUP PLCUNAUDITED NEW BUSINESS PREMIUMSNINE MONTHS TO 30 SEPTEMBER 2005 WORLDWIDE NEW BUSINESS Nine months to Three months to 30 September inc/ 30 September inc/ 2005 2004 (dec) 2005 2004 (dec) £m £m % £m £m %Annual premiumsLife and pensions:- Life 162 167 54 53- Pensions 130 96 45 33 ------- ------- ------ ------- ------- ------UK 292 263 11 99 86 15 - USA 30 41 11 14- Netherlands 10 10 4 4- France 16 13 2 3 ------- ------- ------ ------- ------- ------Total life and pensions 348 327 6 116 107 8 Retail investment business:- UK 12 18 2 4 ------- ------- ------ ------- ------- ------Total new annual premiums 360 345 4 118 111 6 Single premiumsLife and pensions:- Life 1,620 1,266 578 445- Pensions 1,936 1,396 655 602 ------- ------- ------ ------- ------- ------UK 3,556 2,662 34 1,233 1,047 18 - USA 0 1 0 1- Netherlands 117 90 39 26- France 140 105 49 37 ------- ------- ------ ------- ------- ------Total life and pensions 3,813 2,858 33 1,321 1,111 19 Retail investment business:- UK 2,357 1,270 764 260- France 19 14 9 6 ------- ------- ------ ------- ------- ------Total single premiums 6,189 4,142 49 2,094 1,377 52 Annual premium equivalent (APE)- UK life and pensions business 647 529 222 191- Overseas life and pensions business 82 84 26 27Total life and ------- ------- ------ ------- ------- ------ pensions business 729 613 19 248 218 14 - UK retail investment business 248 145 78 30- Overseas retail investment business 2 1 1 1Total retail ------- ------- ------ ------- ------- ------ investment business 250 146 71 79 31 155 ------- ------- ------ ------- ------- ------Worldwide APE 979 759 29 327 249 31 ======= ======= ====== ======= ======= ====== LEGAL & GENERAL GROUP PLCUNAUDITED NEW BUSINESS PREMIUMSNINE MONTHS TO 30 SEPTEMBER 2005 OVERSEAS OPERATIONS IN LOCAL CURRENCY Nine months to Three months to 30 September inc/ 30 September inc/ 2005 2004 (dec) 2005 2004 (dec)USA ($m):New annual premiums 55 74 19 26Single premiums 0 1 0 0 APE 55 74 (26) 19 26 (27) Netherlands (•m):New annual premiums 15 14 5 5Single premiums 171 132 57 37 APE 32 27 19 11 9 22 France (•m):New annual premiums 23 18 4 4Single premiums 205 155 71 54Unit trusts 28 21 13 8 APE 46 36 28 12 10 20 UK INDIVIDUAL APE BY CHANNEL Nine months to 30 September 2005 Annual Single Total APE £m £m £m %Independent financial advisers 155 347 502 65Single tie 74 176 250 32Direct 12 13 25 3 ------ ------ ------ ------ 241 536 777 100 ====== ====== ====== ====== Nine months to 30 September 2004 Annual Single Total APE £m £m £m %Independent financial advisers 126 242 368 62Single tie 91 101 192 33Direct 14 15 29 5 ------ ------ ------ ------ 231 358 589 100 ====== ====== ====== ====== Three months to 30 September 2005 Annual Single Total APE £m £m £m %Independent financial advisers 52 133 185 72Single tie 27 42 69 27Direct 2 2 4 1 ------ ------ ------ ------ 81 177 258 100 ====== ====== ====== ====== Three months to 30 September 2004 Annual Single Total APE £m £m £m % Independent financial advisers 46 88 134 73Single tie 29 15 44 24Direct 4 2 6 3 ------ ------ ------ ------ 79 105 184 100 ====== ====== ====== ====== This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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