10th Jan 2008 08:00
Legal & General Group PLC10 January 2008 NEW CAPITAL STRUCTURERECORD YEAR FOR UK LIFE AND PENSIONS BUSINESSAND FUND MANAGEMENT Legal & General will today brief analysts and investors on the completion of themajor structural components of its Capital Review, as set out on 31 December2007 and will take the opportunity to update the market on headline new businessfigures for 2007. The broad ranging capital review has resulted in a modern, flexible capitalstructure, in support of long-term profitable growth. Detailed new businessfigures for 2007 will be released as previously scheduled on the 24 January2008. New business highlights for 2007 are: UK Life and Pensions up 8% to £1,160m APERisk Business - Protection and Annuities up 4% to a record £423m APEUK L&P Non- Profit Savings up 7% to £504m APELegal & General Investment Management new business up 155% to an exceptional£52.6bn Tim Breedon, Group Chief Executive said: "Legal & General delivered a record year for new business in UK Life andPensions in 2007 and despite tougher market conditions, the fourth quarterproved to be our strongest of the year for both UK and worldwide new businessAPE. "Legal & General Investment Management's new business performance wasoutstanding in 2007. LGIM won over £52 billion in new mandates, reinforcing itsposition as the UK's leading institutional investor. "The UK marketplace is likely to prove just as challenging in 2008 as it was inthe second half of 2007, with the economy forecast to soften as it digests thecredit crunch. However, great opportunities exist for us to further strengthenour outstanding new business franchise, and the changes introduced from thecapital review will provide excellent support to deliver further profitablegrowth." Risk Business Annuities - APE £200m (2006: APE £174m) up 15% on previous record year Bulk purchase annuities (BPA) had a record Q4 and a record year. £62m APE of newbusiness was won in Q4, resulting in £1.12bn (£0.6bn Q4) single premium during2007. There is evidence that the "step-change" in demand from "open" schemesthat we have been anticipating for some time is now taking place. Individual annuities also had a record year with sales 24% higher than 2006. Ourpostcode pricing pilot was successful and is being rolled out more widely. Itwill further enhance Legal & General's position at the forefront of pricingtechnology. Protection - APE £223m (2006: APE £231m) down 3% on previous record year Group protection had a good final Q4. Full year sales for Group protection of£63m APE are broadly in line with 2006, which was itself a strong year. We aimto invest further in product, infrastructure and service to continue growing ourposition in this attractive market. Individual Protection sales held up well in Q4. 2007 finished close to theprevious year at £160m APE. The softening housing market and credit crunch madetrading conditions in the second half of the year more challenging. Legal &General continues to expand distribution and diversify its product range awayfrom housing related sales. In February we will be launching our partnershipwith Nationwide Building Society, which has the potential to be one of ourlargest distribution partnerships. We expect to have maintained market share in2007 and to outperform the market in 2008. Savings Business Savings - APE £504m (2006: APE £469m) up 7% With-profits - APE £228m (2006: APE £191m) up 19% Pensions sales were strong in 2007 as our SIPP launches continued to gaintraction in the market and the A-day benefit effect continued, although now at aslower pace (Non profit pensions APE £253m in 2007 vs APE £207m in 2006).Investment bonds sales slowed in Q4 in volatile investment markets and as theuncertainty around potential tax changes impacted the market. Total new businesssales for investment bonds ended just down on last year (Non profit bond APE£251m in 2007 vs APE £261m in 2006). We are pleased that our successfulpartnership with the market-leading Cofunds fund platform has been broadened andextended. UK Retail Investments - APE £344m (2006: APE £664m), core retail down 1%,wholesale/institutional down 71% Full year sales were down but stronger in Q4. Once again these included some ofthe large transfers of bundled unit trusts from financial institutions whichwere a feature of 2006, but were not repeated to the same extent in 2007.Underlying retail demand was a little weaker in Q4 in line with industry trends. International International - APE £114m (2006: APE £103m) up 11% The USA and France drove business sales growth. In the USA we strengthened ourposition in the high net worth term market, and in France regulatory changeshave stimulated the savings market. Conditions in the Netherlands remainedchallenging. Investment Management Legal & General Investment Management (LGIM) - new business £52.6bn (2006:£20.7bn) up 155% LGIM had another record quarter and another record year, recording gross newbusiness of £20.2bn and £52.6bn respectively. Our core product offering andstrong client service continues to resonate with the investment marketplace. UKcorporate and local authority pension funds continued to invest in LGIM's indexfunds and structured solutions. Although the business is showing good momentumand we are confident of further progress in 2008, it is unlikely that thisexceptional level of inflows will be repeated. ENDS. Notes to Editors There will be a presentation held today at 9.30am at One Coleman Street, LondonEC2R 5AA. There will be a live audiocast of the presentation which can be accessed athttp://www.legalandgeneralgroup.com/investors/presentations.cfm. Thepresentation slides will be available from 09.20 GMT. There will be a live listen only teleconference link to the presentation. UKinvestors should dial 0800 694 1449 and overseas investors should dial +44 (0)1452 560304. The conference ID number is 30184565. About Legal & General Legal & General is a leading UK risk, savings and investment group. Founded over170 years ago, Legal & General today provides life assurance and other financialprotection products, annuities and long-term savings products including ISA'sand pensions. With over £250 billion in funds under management, it is also thelargest investor for UK pension funds. Legal & General has over 5.5 million UKcustomers. Our products are sold through over 30 bank and building societyrelationships, through Independent Financial Advisers and also directly tocustomers. Legal & General Assurance Society Limited, our principal operatingcompany, is one of Europe's top rated life companies for financial strength,with an AA+ rating from Standard & Poor's and Aa1 from Moody's. Enquiries to: Investors: Jonathan Maddock, Head of Investor Relations 020 3124 2150Nicola Marshall, Investor Relations Manager 020 3124 2151 Media: John Godfrey, Corporate Communications Director 020 3124 2090Anthony Carlisle, Citigate Dewe Rogerson 07973 611888Richard King, Head of Media Relations 020 3124 2095 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. 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