Fast read

mouse
touch
keyboard
swipe
and or

Key performance indicators (KPIs) are defined as the measures by which the development, performance or position of the business can be measured effectively. The Group Board reviews the KPIs annually and updates them where appropriate.

Operating Profit
£1,275m
(2013: £1,158m)

See A growth story section for a full breakdown of operating profit

Key measure in the remuneration of executives
Key measure in the remuneration of executives
Earnings Per Share (EPS)
16.70p
(2013: 15.20p)
Key measure in the remuneration of executives
Key measure in the remuneration of executives
Net Cash Generation
£1,104m
(2013: £1,002m)

See Sustainable returns section for a full breakdown of net cash generation

Key measure in the remuneration of executives
Key measure in the remuneration of executives
Full Year Dividend
11.25p
(2013: 9.30p)
IFRS Profit Before Tax*
£1,238m
(2013: £1,144m)

* IFRS profit before tax attributable to equity holders

Key measure in the remuneration of executives
Key measure in the remuneration of executives
Total Shareholder Return (TSR)
184%
(2013: 171%)

Over the three-year period ended 31 December 2014

Key measure in the remuneration of executives
Key measure in the remuneration of executives
Return On Equity
16.9%
(2013: 16.1%)
Key measure in the remuneration of executives
Key measure in the remuneration of executives
Worldwide Employee Engagement Index*
77%
(2013: 77%)

* This worldwide index replaces the UK engagement index used in previous years

We include measures here which have not been determined to be KPIs by the Group Board, but which we use in deciding executive remuneration or other measures which we believe are integral to the group’s performance.

Economic Capital Surplus
£7.0bn
(2013: £6.9bn)

Figures are pre-accrual of proposed final dividend

Economic Capital Coverage Ratio
229%
(2013: 251%)
Standard & Poor’s Financial Strength
AA-
(2013: AA-)

Standard & Poor’s financial strength rating for Legal & General Assurance Society Limited

Key measure in the remuneration of executives
Key measure in the remuneration of executives

Business structure

We’re reporting our 2014 results split between five businesses: LGAS, LGR, LGIM, LGC and LGA.

From 1 January 2015, LGAS has been replaced by two new segments. ‘Insurance’, covers retail protection, group protection, general insurance, France and the Netherlands. ‘Savings’ comprises ‘Digital Savings’ including our Cofunds and Suffolk Life businesses, as well as our ‘Mature Savings’ business. LGIM now includes our corporate pensions business.

Our reporting focuses on success across the group rather than segmental reporting. Making use of synergies of resources and objectives is fundamental to our success.

In future, our half year results and full year results will reflect this new operating structure.

Operating profit by business segment

£1,483m*

* 2014 operating profit of £1,275m includes £1,483m from divisions, less £208m from group level investment projects, interest and expenses.

Our businesses work together to provide financial security for customers.

Legal & General Assurance Society (LGAS)

In 2014, LGAS was responsible for retail protection, group protection, general insurance, corporate pensions, individual pensions and platforms.

From 2015 LGAS will be replaced by two new segments:

LGAS Insurance

Our Insurance business covers 1.8 million people in group protection schemes, over 3.8 million individual protection customers and 1.5 million general insurance customers.

LGAS Savings

Our savings business has assets of £124 billion, including around £72 billion of assets held on the Cofunds platform.

LGAS Insurance gross written premiums
£2,008m
(2013: £1,923m)
LGAS Savings assets under administration (AUA)
£124bn*
(2013: £113bn)

*This includes workplace savings assets.

Legal & General Retirement (LGR)

We have around 1 million customers and £44 billion of assets. Our corporate business, with £29 billion of assets, helps companies de-risk corporate pension schemes with buy out, buy-in and longevity insurance arrangements. Our individual retirement business helps turn customers’ pension savings into retirement income.

LGR annuities single premiums
£6,578m
(2013: £4,089m)

Legal & General Investment Management (LGIM)

Our asset management business with £709 billion of total assets, manages investments on behalf of institutional and retail customers. We are the largest manager of UK pension fund assets, with over 3,000 schemes and have a growing international footprint. From 2015, LGIM is additionally responsible for managing the majority of our workplace pensions business, helping over 1.2 million people save for retirement.

LGIM total assets
£709bn
(2013: £612bn)

Legal & General Capital (LGC)

Our purpose is increasing the risk adjusted returns on the group’s £57 billion principal balance sheet. Increasingly, we seek out attractive direct investments which have a long investment horizon. In this way we can leverage the benefits of the group’s solvency margin.

LGC total shareholder assets
£57.2bn
(2013: £43.7bn)

Legal & General America (LGA)

We’re a top three US protection provider. We have over 1 million customers and wrote over $1.1 billion in premiums in 2014. We focus on providing term life protection products to individuals through concentrating on underwriting expertise and excellence in customer service.

LGA gross written premiums
£678m
(2013: £654m)

OUR FOCUS, STRATEGIC RESPONSE AND PROGRESS

EVIDENCE

The world is getting greyer
By 2030 there could be 20 million over 60s in the UK (27% of the population).

OUR STRATEGIC AIMS

Maintaining global leadership in pensions derisking and providing a suite of retirement income products

PROGRESS
£44bn

Annuity assets

44%

Market share of the UK liability driven investment fund (LDI) solutions market

EVIDENCE

The cost of welfare payments
Despite an austerity programme, the UK state deficit for 2014 stood at £97 billion.

OUR STRATEGIC AIMS

Helping people achieve security affordably through insurance and workplace pensions

PROGRESS
1.2m

People saving in workplace pensions

1.8m

Group protection members and 3.7 million retail protection customers

EVIDENCE

Fast money, Slow money
The UK needs to build at least 250,000 homes a year to meet the nation’s housing demand.

OUR STRATEGIC AIMS

Using ‘slow money’ to become the UK leader in direct investments, including housing

PROGRESS
£5.7bn

Invested to date into direct investments, including infrastructure projects

£252m

Invested into ‘Places for People’, the largest direct investment into affordable housing

EVIDENCE

Homogenous asset markets
The combined North American and Asian investment markets are eight times bigger than the UK’s.

OUR STRATEGIC AIMS

Building a world class international asset management business

PROGRESS
£129bn

International assets

26%

Growth in 2014 LDI assets, including the US. See The world is getting greyer for more details on LDI solutions

EVIDENCE

The connected world
52% of all internet traffic to retail websites is now via smartphones or tablets.

OUR STRATEGIC AIMS

Achieving market leadership in digital provision of insurance, retail investments and personal pensions

PROGRESS
£72bn

Platform assets

80%

Retail protection policies accepted and processed using information collected online

Progress

  • Our £3 billion ICI transaction was the UK’s largest bulk annuity deal
  • We increased our international assets to £129 billion
  • We wrote £1.4 billion of UK protection premiums
  • We’ve now invested £5.7 billion into direct investments, including urban regeneration schemes in Canning Town and Salford
  • We invested £252 million with ‘Places for People’ to build 7,000 new homes
  • We increased our workplace pensions assets to £11 billion

Priorities

  • Further developing our pension risk transfer capabilities
  • Continuing the international expansion of our investment management business
  • Progressing our digital strategy
  • Agreeing an appropriate Solvency II regulatory capital position with the Prudential Regulation Authority (PRA)
  • Growing our direct investment business
  • Building a market leading defined contribution UK pensions business