Legal & General Reports H1 Operating Profit Beat

By Scott Kanowsky 

Investing.com -- Legal&General (LON:LGEN) has posted better than expected first-half income thanks to strong performance at the life insurer's key bulk annuities that helped offset a fall in assets under management.

The business posted an 8% increase in operating profit to £1.16 billion in the first six months of the year, in line with company-supplied expectations.

"All four of our divisions are well positioned to execute on compelling structural market opportunities to deliver further profitable growth over the medium and long-term, notwithstanding market volatility," Legal&General said in a statement.

Underpinning this growth was growth at the company's retirement solutions division, which insures corporate pension plans. Legal&General added £4.4 billion in new bulk annuity premiums, up from £3.1 billion versus the half-year period in 2021, as company demand for insurers to take on pension assets and liabilities grew.

The group's housing business also grew to £2.19 billion, reflecting a "sustained" upturn in home demand in the U.K.

Meanwhile, Legal&General's investment management division saw inflows more than double to £65.6 billion despite a 3% drop in assets under management. Operating profit at the unit declined by 2% to £200 million, with Legal&General dubbing it "a resilient result" in light of recent market volatility.

"We are committed to providing financial security for our customers and colleagues in a tough economic climate and remain confident in our ability to grow profits sustainably and at attractive returns over the long-term,” said Legal&General chief executive officer Nigel Wilson.

The company's Solvency II ratio, which measures its capital level in relation to its required amount, rose to 212% from 187% as global interest rates increased but missed forecasts.