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L&G retirement profits surge 10% to £310m

Legal & General has posted a 10 per cent increase in pre-tax profit for 2013 from £1.03bn to £1.13bn as bulk annuity sales surged to £2.8bn.

L&G’s annual results, published last week, revealed a 10 per cent increase in year on year operating profits for its retirement business from £281m to £310m.

Annuity business rose 78 per cent from £2.3bn to £4.1bn, primarily due to a 180 per cent jump in bulk annuity business from £1bn in 2012 to £2.8bn in 2013.

Individual annuity sales were flat at £1.3bn, which L&G attributes to pensioners deferring retirement, the introduction of gender neutral pricing and the RDR.

L&G says three-quarters of its individual annuity sales came from external sources. 

L&G Assurance Society, which includes the insurer’s protection and savings businesses, saw a 4 per cent fall in operating profit from £462m to £444m.

Protection sales remained broadly flat, going from £221m in 2012 to £218m last year.

The workplace business saw losses double from £14m to £29m, which L&G says is due to “the costs and continued investment associated with securing 500,000 new auto-enrolees outweighed the low early years’ revenue”.

Syndaxi Chartered Financial Planners managing director Robert Reid says: “L&G’s annuity sales will stay flat until it gets a competitive enhanced annuity proposition out in the market. 

“There was a scramble among the big providers to win big auto-enrolment schemes.”

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