Legal & General has published details of its realistic balance sheet revealing a risk capital margin covered nearly five times by its capital.
The realistic balance sheet for 2003 shows total assets of £18.6bn and liabilities of £17.6bn, leaving a with-profits estate of more than £1bn. Its total risk capital margin is £960m, leaving an excess over the RCM of £70m. Guarantees and option costs account for only 5 per cent of asset shares and L&G has £4.6bn in society capital to cover its RCM by 4.7 times.
L&G says its financial position means it has considerable scope for management action and it intends to operate the with-profits part of its long-term fund without external support.
Hargreaves Lansdown head of pensions research Tom McPhail says the asset mix of the with-profits fund is still very strong, with 51 per cent in UK and overseas equities and 18 per cent in property.