Strong trading performance

Gross written premiums on insurance business (GWP)
£3.0bn
(2013: £2.8bn)
Annuities single premiums
£6.6bn
(2013: £4.1bn)
LGIM total assets
£709bn
(2013: £612bn)
LGAS savings assets
£124bn
(2013: £113bn)

Gross written premiums on insurance business (GWP)

GWP is an industry measure of life insurance premiums due and general insurance premiums underwritten in the reporting period, before any deductions for reinsurance.

 

2014
£m

2013
£m

UK Retail protection

1,056

990

UK Group protection

351

336

General insurance

377

375

France protection

173

168

Netherlands protection

51

54

US protection

678

654

Longevity insurance

333

212

Total GWP on insurance business

3,019

2,789

Annuities single premiums

Single premiums arise on the sale of new contracts where the terms of the policy do not anticipate more than one premium being paid over its lifetime, such as in individual and bulk annuity deals.

 

2014
£m

2013
£m

1.

Excludes internal transfer from the with-profits fund of £1,953m in 2014.

Bulk purchase annuities

5,987

2,812

Individual annuities

591

1,277

Total annuities single premiums1

6,578

4,089

LGIM total assets

Assets represent assets under management (AUM), notional derivative positions and advisory assets. Together, these represent the total value of assets on which LGIM earns ad valorem fees.

 

2014
£bn

2013
£bn

1.

See glossary for definitions.

Assets under management

499

450

Overlay assets1

195

162

Advisory assets1

15

Total LGIM assets

709

612

LGAS savings assets

Assets represent the total amount of money held within all of our savings products. These funds are invested by a number of investment managers, including LGIM.

 

2014
£bn

2013
£bn

1.

Platforms includes Cofunds and Investor Portfolio Services (IPS).

2.

Mature Retail savings products include with-profits products, bonds and retail pensions.

3.

Consolidation adjustment represents Suffolk Life and Mature Retail savings assets already included in the platforms assets.

Platforms1

72

64

Mature retail savings2

36

36

Workplace

11

9

Suffolk Life

8

7

Overseas LGAS savings

4

4

Consolidation adjustment3

(7)

(7)

Total LGAS savings assets

124

113

BUSINESS SEGMENT

Legal & General Assurance Society (LGAS)

£2,008m
Insurance GWP
(2013: £1,923m)
£124bn
Savings assets
(2013: £113bn)

John Pollock, CEO

Retail protection extends its market leading position

Retail protection continues to hold a market leading position. GWP grew from £990 million in 2013 to £1,056 million for 2014, reflecting the advantages of our distribution footprint, underwriting excellence and highly automated systems.

Group protection GWP grew to £351 million, 4% up on 2013

We have seen continued growth in GWP from our competitive product offering and a number of new customer wins during the year.

Workplace assets exceed £11 billion

Assets are 28% up from the prior year, reflecting further auto-enrolment success and strong flows from the existing customer base. We enrolled over 300,000 new members into our Workplace pension schemes in 2014.

Platform assets up a further £8 billion

Assets are 12% up from the prior year to £72 billion, driven by positive flows across all channels (institutional, retail and bancassurance).

Legal & General Retirement (LGR)

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

Kerrigan Procter, MD

A further record breaking BPA performance

Bulk purchase annuities (BPA) single premiums of £6.6 billion were bolstered by winning the two largest bulk annuity transactions ever to be written in the UK with the ICI pension fund and TRW automotive pension scheme. BPA sales were over twice the record set last year and have more than offset reduced individual annuity sales.

Following the budget reforms, individual annuity premiums are down 54% broadly in line with our immediate expectations at the time of the budget announcement. We foresee that individual annuities will fall even further in 2015, but we have responded with a range of new, alternative individual retirement solutions, providing flexibility and choice to consumers. These include ‘cash out’ and ‘fixed term’ retirement plans and lifetime mortgages.

Legal & General Investment Management (LGIM)

£709bn
Total assets
(2013: £612bn)

Mark Zinkula, CEO

International expansion continues resulting in record assets

LGIM achieved record growth with total assets increasing by 16% to £709 billion (2013: £612 billion). International assets are £129 billion, and have quadrupled in the last four years.

Total positive net flows of £7.6 billion were achieved during 2014 despite net outflows in assets under management, in UK index funds, reflecting the derisking trend across the industry. The overall positive flows were driven by strong demand for our liability driven investment (LDI) strategies, with solutions and overlay asset flows of £21.1 billion in 2014 (2013: £15.4 billion). £11 billion of gross flows were sourced from outside the UK, particularly from the US.

Legal & General America (LGA)

£678m
GWP
(2013: £654m)

Jimmy Atkins, CEO

US sales maintained whilst delivering new pricing model

Sales have increased marginally by 4% from the prior year despite the introduction of a more refined pricing model where prices were raised at lower margin points and reduced elsewhere. This has led to a change in business mix resulting in a slight reduction in new business volumes in the second half of 2014.

LGA is the third largest provider of term assurance in the US.

Mortality claims have been higher than anticipated in 2014 and we will monitor closely to determine whether this represents the emergence of a trend or simply normal variability from one period to the next.