View more on these topics

L&G predicts further slump in individual annuity sales

Legal & General is predicting its individual annuity sales will fall by half again this year on top of the 54 per cent slump in sales seen last year.

The pension freedoms reforms have resulted in a fall in L&G’s individual annuity sales from £1.3bn in 2013 to £591m in 2014.

In its results, published today, the insurer says: “We continue to expect the market to remain subdued in 2015, anticipating volumes to be down a further 50 per cent in 2015. We are focused on maintaining pricing discipline during this period of change.”

But total annuity business volumes have doubled over the year from around £4.1bn to £8.5bn, driven by a 112 per cent rise in bulk annuity sales from £2.8bn to just under £6bn. L&G’s total annuity business was also boosted an internal £2bn in annuities transferred from its with-profits business to its shareholder fund in July.

Total assets under management at L&G Investment Management went from £449.5bn to £499.1bn. But the insurer’s asset management arm was hit by a massive 63 per cent drop in net asset flows from £20.3bn to £7.6bn. Net outflows saw a dramatic rise from £200m to £16bn, as defined benefits passive funds sought to de-risk.

New business premiums for UK protection rose 6 per cent from £218m to £230m, with retail protection sales up 11 per cent from £148m to £165m.

Overall L&G posted an 8 per cent increase in pre-tax profit from £1.1bn to £1.24bn.

L&G group chief executive Nigel Wilson says: “The five global macro trends driving our strategy – ageing populations, globalisation of asset markets, welfare reform, digital connectivity and bank retrenchment – create long-term growth opportunities, which we position our businesses to capture.

“The rapid growth of LGIM’s international business to over £100bn, the £5bn of investment in physical assets in the UK, and our entrance into the lifetime mortgage market are all examples of the successful execution of our strategy.”

Recommended

Brian-Tora-MM-Peach-700x450.jpg

Brian Tora: Time to take commercial property warning signs seriously?

After hardly featuring in my postbag for some time, suddenly property is cropping up all over the place. I am talking commercial property here: an asset class that has delivered handsomely recently. Quite why it is attracting attention is hard to gauge. One email canvassed my opinion on its attractions as an asset class, given […]

Technology-Tech-Currency-Money-700x450.jpg

Is lenders’ digital shift a threat to mortgage brokers? – no data this week

Lenders are preparing to fight back in the battle for market share by ramping up their execution-only digital sales platforms. But does this represent a threat to growth in the broker market? Under MMR, a residential mortgage sale can only be non-advised where there is no interaction with the borrower. This means it must be […]

John Porteous Peach 250x255
5

John Porteous: Don’t let technology dominate the advice process

Given the lack of any universally accepted definition as to what financial planning means and how it should be applied in practice, it is hardly surprising much of our profession questions how best to deliver a planning-led service with the rigour and discipline that scale requires. There is certainly a strong consensus that planning involves […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com