In 2018, Legal & General broke a record and hit £10bn in annuity sales during a decent year for the firm.
The insurer’s operating profit increased by 10% from the previous year, from £1.723bn in 2017 to £1.902bn. However, its profit after tax fell 3% over the year to £1.8bn.
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Legal & General results
Legal & General Insurance (LGI) saw limited growth of 2% in 2018 from £303m to £308m. Adverse US mortality experience offset the performance in the UK. In a positive, new business premiums grew 14% to £343m.
In both the UK and the US, LGI implemented technology in attempts to optimise its operations over 2018. This includes the use of robotics in its customer administration.
The General Insurance business implemented technology such as ‘SmartClaim’ and ‘SmartQuote’ to deliver operational efficiency and an improved customer experience.
It is also investing in insurtechs and start-ups. One example is Salary Finance, a financial wellbeing platform for employees, which now has over 700,000 staff registered. It expects another 300,000 on there by the end of Q2 2019.
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By GlobalDataNigel Wilson, Group Chief Executive of Legal & General, said: “Legal & General’s consistent strategy, market leading businesses, balance sheet strength and high quality people have enabled us to deliver eight years of compound annual profit growth of over 10%. 2018 saw political uncertainty, asset market declines and slowing economic growth, but we are resilient and performed strongly. We became the UK’s first £1 trillion investment manager, executed a record £9 billion of pension risk transfer deals and invested billions in the UK’s future infrastructure and cities. Abroad, we grew US protection new business annual premiums by 12% and increased international assets by 13% to £258bn.
“Excluding our £433m positive mortality release, operating profit was up 10% to £1.9bn and we had EPS growth of 7%, DPS growth of 7%, book value growth of 13% and an RoE of 23%. We are a globally trusted brand. Our strategy positions us well despite the broader environment, our current trading is strong and we expect this momentum to continue in 2019.”
