L&G Bulk Annuities Boost Third Quarter Sales

Mark Shapland

5 November 2014

Individual annuity sales have continued to plummet a UK insurer following George Osborne's budget announcement back in March that “no one will have to buy an annuity.”

Sales were down 51 per cent during the third quarter at £125 million ($200 million) compared to the same period last year and have fallen 53 per cent for the year so far.

As a result L&G has now shifted its focus to workplace saving and bulk annuity deals, which take on liabilities from company pension schemes, chief executive Nigel Wilson said.

“The financial engine for LGR will be the bulk market,” he said.

And bulk annuity sales have been strong, increasing 29 per cent to £3.4 billion in the third quarter, compared with £2.6 billion a year ago.

Total annuity assets at Legal and General increased by 16 per cent over the quarter to £39.9 billion, up from £34.5 billion on the same period in 2013.

Meanwhile net cash generation was up 12 per cent to £827 million compared with £740 million a year earlier. At the same time assets under management rose 14 per cent from a year ago to £676 billion.

“We remain confident in our ability to deliver economically and socially useful products for our customers and strong and sustainable growth for our shareholders. Recent market volatility is a reminder of the on-going market uncertainty that still exists and while no model can be completely immunised, we believe our strategy creates a high degree of resilience,” added Wilson.