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Legal & General half-year profits hit £1bn after pension policies surge

By Henry Saker-Clark, PA City Reporter

Legal & General has seen half-year profits soar past £1 billion as it was boosted by a bumper period for pension policies.

The life insurance and financial services firm reported an 11% jump in operating profit to £1 billion for the six months to June.

The FTSE 100 firm was buoyed by the resurgence of the annuities market, as pension packages such as bulk annuity schemes saw sales grow rapidly.

Legal & General said it has completed over £8 billion of bulk annuity deals so far this year, compared to £10 billion in deals for the entirety of 2018.

The half-year also included one of the UK’s largest bulk annuity deals, as it completed a £4.6 billion deal with the Rolls-Royce pension scheme covering 33,000 pensioners.

Nigel Wilson, group chief executive, said: “We have a depth of management, track record and opportunities that mean all five of our businesses should contribute to future growth.

“We are well prepared for the full range of foreseeable Brexit outcomes and we remain confident in our ability to deliver inclusive capitalism, growing value for shareholders, customers and the broader economy.”

During the first half, the firm also announced the sale of its general insurance business to Allianz for £242 million.

Richard Hunter, head of markets at Interactive Investor, said: “Even though it finds itself in an unloved sector, Legal & General is clearly a business firing on all cylinders.

“The muted reaction to a strong set of numbers is somewhat symptomatic of the difficulty the company has in convincing the market of its longer term potential.

“As the company strives to lessen its reliance on its UK market and spread the risk geographically, the market consensus of the shares as a hold, albeit a strong one, is likely to remain in place.”

Shares in Legal & General slipped 1.1% to 242.5p in early trading on Wednesday.