£2 billion of direct investments in 2016
Legal & General Retirement today announced it has invested over £2 billion in direct investments, including infrastructure, housing and lifetime mortgages in 2016, over double last year's investment.
Notable investments in 2016 include the funding of the new Amazon distribution centre, and the third berth at the London Gateway port.
The direct investment portfolio now stands at £8.4 billion, and makes up c.16% of the assets within the annuity portfolio. Direct investment delivers attractive risk adjusted returns for customer pensions, shareholders, and creates new jobs and economic growth in the UK.
Kerrigan Procter, Managing Director of Legal & General Retirement, said:
"Legal & General plans to invest more funds into Direct Investment. The speed and the amount could both be increased should Solvency II regulation be amended to allow for more favourable capital treatment for infrastructure investment, than under the present rules. This would be in the interest of customers, shareholders and the UK."
Annuity sales are now at £6.9 billion for the year, with total Legal & General Retirement sales at £7.5 billion. As guided the decrease in the Group's Solvency II surplus from new business regulatory capital strain is expected to be less than £200m (circa 3% of premiums) for business year to date.
The lifetime mortgage business has now received over £1 billion in applications for 2016, and is on track to complete £600 million in lifetime mortgage sales by the end of the year (£231m, HY 2016). Lifetime mortgages support our direct investment activity, as under Solvency II, they are structured for matching adjustment eligibility.
Legal & General Retirement sales and direct investment figures stated are as at week 50 in 2016. Figures disclosed by the business at the Investor Day on 5 December were for week 48 2016.
For further information, please contact:
Laura Doyle, Head of Investor Relations
020 3124 2088
Sujee Rajah, Investor Relations Manager
020 3124 2047
Richard King, Head of Group Corporate Communications
020 3124 2095
Notes to editors:
Legal & General Group Plc:
1.Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £14.6bn (as at 08 December 2016) and is responsible for investing £841.5bn worldwide (as at 30 June 2016) on behalf of investors, policyholders and shareholders.
2.Legal & General has over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance.
3.In 2015, Legal & General's operating profit (IFRS basis) was £1,455m and adjusted earnings per share were 18.58p for the period, an increase of 14% and 11% respectively. For H1 2016 Legal & General's adjusted operating profit was £822m, an increase of 10%, profit before tax attributable to equity holders was £826m, an increase of 23%, adjusted earnings per share were 11.20p for the period, an increase of 14%, and net cash generation of £727m, an increase of 16%.
For more information on Legal & General, please see http://www.legalandgeneralgroup.com/
This announcement may contain certain forward-looking statements relating to Legal & General, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature, forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make.