Figures released by Legal & General show an increase in operating profit of 54 per cent across its Retirement Division to GBP1,247m in 2017, driven by strong business performance in both its Institutional and Retail divisions, and a GBP332m mortality assumption update.
Operating profit excluding the mortality release is up 13 per cent.
The strong performance within both the Retail and Institutional divisions of Legal & General Retirement has led to year-on-year growth of 7 per cent, with assets now totalling GBP58.2 billion, up from GBP54.4 billion.
The FTSE 100 Companies’ results show strong new business sales across both sides of the retirement business, totalling GBP6.4 billion.
In the Retail division, individual annuity sales increased by 78 per cent to GBP671 million, the highest volume since 2014, while lifetime mortgage sales broke through the GBP1 billion barrier, with sales up by 62 per cent from GBP620 million. Since Legal & General’s entry into the lifetime mortgage market in 2015, the company’s Retail Retirement division now has a 33 per cent share of the market.
On the Institutional side of the business, Legal & General Retirement closed 31 buy-ins and buy-outs, totalling GBP3.4 billion, representing a market share of 27 per cent. The largest overall market deal in 2017 was the GBP1.2 billion buy-in of the Pearson Pension Plan, one of the company’s long-standing clients. The division also completed 15 US Pension Risk Transfer deals totalling GBP543m and a longevity insurance transaction of GBP800m.
Chris Knight (pictured), CEO, Legal & General Retail Retirement, says: “Our Retail division delivered a great set of results in 2017. What’s more, we achieved this by staying true to our values and putting customers first, which included taking extra care of vulnerable people in order to make sure they have access to the best financial solutions to suit their circumstances.
“Our ultimate mission is to help people lead great lives in retirement. We’re also working with colleagues across L&G and with external partners to encourage people to start retirement planning earlier in life. We’re now making a real difference to over half a million customers, looking after GBP20 billion of their assets.
“With at least 700,000 people coming to retirement age each year and approximately GBP1.5 trillion of housing equity owned by the over-60’s, I look forward to both growing the market and our share of it in 2018 and beyond.
“At Legal & General, we are aware that different solutions suit different customers, which is why we offer a wide variety of choice to ensure that each and every individual receives the right guidance and reaches the decision that is best for them.
“The 2017 results are a testament to our commitment to helping people enhance the quality of their lives in retirement.”
Laura Mason, CEO, Legal & General Retirement Institutional, says: “While our results show that the division has gone from strength to strength last year, we have not lost sight of our core mission. We aim to provide income and security in retirement to our customers.
“We currently manage the pensions of over half a million people and provide support and solutions to companies that are responsible for large pension funds and future retirement obligations.
“Our pension risk transfer business helps the trustees of defined benefit pension schemes and their sponsoring companies to settle their pension obligations and better secure their members’ benefits. In the past five years alone, we have secured more than 15 billion of liabilities and insured over 80,000 pension scheme members.
“Furthermore, we are able to invest these pension savings directly into the economy through infrastructure, housing, clean energy, urban regeneration and SME finance. We support small businesses and start-ups with debt and equity, putting pension assets to good use. I look forward to further success in 2018.
“Pensions are one of the big financial and social policy challenges of our time and the work we do at Legal & General Retirement is a genuine solution to many of these issues and is making a real difference.”