Legal & General Full Year Results 2018

Record £10bn annuity sales, AUM exceeds £1tn, operating profit up 10% to £1.9bn

Financial highlights2

  • OPERATING PROFIT1 OF £1,902M, up 10% (2017: £1,723m)
  • EARNINGS PER SHARE3 OF 24.74P, up 7% (2017: 23.10p) - impacted by reductions in asset markets
  • RETURN ON EQUITY AT 22.7% (2017: 25.6%)
  • FULL YEAR DIVIDEND UP 7% TO 16.42P PER SHARE (2017: 15.35P)
  • PROFIT AFTER TAX4 DOWN 3% TO £1,827M (2017: £1,891M) - prior year one-off US tax benefit of £246m
  • SOLVENCY II COVERAGE RATIO5 OF 188% (2017: 189%)
  • SOLVENCY II OPERATIONAL SURPLUS GENERATION UP BY 14% TO £1.4BN (2017: £1.3BN)

Business highlights

Investing & Annuities

  • LGR PENSION RISK TRANSFER SALES6 OF £9.1BN (2017: £3.9BN)
  • LGR INDIVIDUAL ANNUITY SALES UP 18% TO £795M (2017: £671M)
  • LGR LIFETIME MORTGAGE ADVANCES UP 19% TO £1.2BN (2017: £1.0BN)
  • GROUP-WIDE DIRECT INVESTMENT UP 34% AT £19.2BN (2017: £14.4BN)

Investment Management

  • LGIM AUM UP 3% AT £1,015BN (2017: £983BN)
  • LGIM EXTERNAL NET FLOWS OF £42.6BN (2017: £43.5BN)

Insurance

  • LGI TOTAL GWP UP 3% TO £2,615M7 (2017: £2,531M8), INCLUDING US GWP OF $1,299M (2017: $1,254M)
  • GENERAL INSURANCE GWP UP 11% TO £410M (2017: £369M)

 

1 Excludes mortality release of £433m (2017: £332m) from LGR’s £44.5bn net longevity exposure. 2018 mortality release relates to changes in longevity improvement assumptions to align to CMI 2016 tables. Including the reserve release, operating profit was up 14% to £2,335m (2017: £2,055m).
2 The Alternative Performance Measures within the Group’s financial highlights are defined in the glossary, on pages 91 to 96 of this report.
3 Excludes post-tax mortality release of £359m (2017: £274m), and a 2017 one-off US tax benefit of £246m. Including these impacts, EPS was down 3% at 30.79p (2017: 31.87p).
4 Profit after tax attributable to equity holders. Profit after tax attributable to equity holders was up 7% at £1,468m (2017: £1,371m) excluding mortality releases and the 2017 one-off US tax benefit.
5 Solvency II coverage ratio on a shareholder basis is adjusted for the Own Funds and SCR of the With-profits fund and the Group final salary pension schemes.
6 Excludes Longevity Insurance transactions (2018: £287m, 2017: £800m).
7 Constant FX rate comparisons have been calculated by applying the average FX rates for 2017 to both 2017 and 2018 local currency results. Based on actual FX rate, up 2% to £2,580m. Actual FX rate comparisons apply the 2017 and 2018 average FX rates to the equivalent periods’ results respectively.
8 Excludes Legal & General Netherlands which was sold on 6 April 2017.

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