Progress on strategy

Strategic response to trends

Progress on Strategic responses

Helping DB pension schemes de-risk their liabilities

We can help pension schemes in every stage of the derisking journey. In 2014, we wrote the UK’s biggest buyout and largest buy-in transactions and have a 44% share of the UK LDI market.

Helping our customers achieve security affordably through protection and workplace pensions

We’re the UK’s biggest provider of individual life protection, protecting over five million people and are one of the market leaders in workplace pensions, with £11 billion assets under administration.

Using our ‘slow money’ to rebuild Britain through direct investments

We’ve committed to a long term goal of investing £15 billion into direct investments such as infrastructure developments in housing, care homes, hospitals, transport and regeneration of our cities. To date we’ve invested £5.7 billion of ‘slow money’.

Building a world-class asset management business

We’ve been using our expertise in the UK to expand into US, Gulf and Asian markets. We have now achieved £129 billion in international assets.

Building successful digital solutions

We’re implementing our strategy to use digital technology to help people achieve financial security with online insurance, pensions and investment solutions.

We’ve built success by responding to macro trends

Our strategy is based upon five macro trends: ageing populations; globalisation of asset markets; welfare reform; bank retrenchment; and digital connectivity.

By tapping into these macro trends our businesses have built success, which benefits our customers, our shareholders and society.

IN RESPONSE TO AGEING POPULATIONS

Helping DB pension schemes de-risk their liabilities

  • Remained the UK’s market leader for liability driven investments (LDI). A 2014 KPMG report said we have a 44% market share
  • Helped the TRW pension de-risk its liabilities, by moving through LDI to a £2.5 billion buyout, the UK’s biggest ever contract of this type
  • Wrote the UK’s biggest buy-in plan with a £3 billion contract with ICI

Global leadership

We participate in every facet of the derisking journey, from managing investment risk, to liability driven investment to using bulk annuities for buy outs and buy-ins.

Market prospects

Our strategy helps us overcome the impact of outflows from our DB pensions investment management business. Our market leading position in bulk annuities gives us huge scope to benefit from the £1.7 trillion market to derisk DB pension liabilities.

Where possible, we pool our expertise with our colleagues in LGIM to identify unique ways to manage pension scheme risk.”

Kerrigan Procter, MD, Legal & General Retirement

IN RESPONSE TO WELFARE REFORM

Helping customers achieve security

  • Built a 20% share of new auto-enrolled pensions and £11 billion in workplace pension assets
  • Increased our UK protection market share to around 25%

Protection growth prospects

The maturity of the UK protection market means growth prospects may be limited. However, as state welfare funding reduces, private provision could become more important.

Owl figurines (photo)

Rehabilitation benefits everyone

Our Group Income Protection rehabilitation service helps scheme members, employers, society and our shareholders. Employees get fast access to rehabilitation services from leading specialists and almost 80% of long term absentees return to work before a typical six month deferred period. This reduces the length of claims, increases profitability and prevents people falling back on state benefits.

IN RESPONSE TO RETRENCHING BANKS

Using our slow money to rebuild Britain through direct investments

  • £5.7 billion of direct investments already put into infrastructure projects
  • Supporting the building of new homes to help Britain overcome its housing crisis

Urban regeneration

Our partnership with the English Cities Fund has helped fund regeneration schemes in Liverpool, London – Canning Town, Salford and Wakefield, creating 3,000 new housing units.

Future activities

We’re continuing to fund regeneration and infrastructure projects. CALA, our jointly owned housebuilder is targeting £800 million of sales by the end of 2016.

7,000
New homes to be built by ‘Places for People’
£15bn
Commitment to invest in UK infrastructure
£1bn
Invested in new student accommodation, some with 60-year maturities
£220m
Invested into the care home sector

IN RESPONSE TO GLOBALISATION OF ASSET MARKETS

We aim to build a world class asset management business

  • Increasing international assets with £129 billion invested to date
  • Our US business continues to grow in LDI and active fixed income strategies

International growth prospects

Our strategy enables us to offset the outflows we’re seeing from DB pensions funds in the UK. 2014 saw us expand our overseas business. We’re using our expertise in the UK to build our US business, based in Chicago. We already have expertise in LDI and active fixed interest and we’re entering the DC market and building index capabilities. Going forward, we’re looking to widen our product and distribution reach.

FURTHER READING

lgima.com

IN RESPONSE TO DIGITAL LIFESTYLES

Building successful digital solutions

  • Our investment fund platform is the UK’s largest, with around £72 billion in assets under administration
  • Our new ‘Online Scheme Setup’ self-serve facility allows small and medium size enterprises (SMEs) to set up their own auto-enrolment pension scheme

Our vision is to make it simple for people to achieve financial confidence through digital media.”

Dominic Collins, Chief Marketing Officer, Legal & General

Future prospects

We’ve made some progress in developing digital capabilities, but further work is needed to offset the managed decline of the contribution from mature savings products.