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Legal & General extends investment focus beyond Britain as profit jumps

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·2-min read
FILE PHOTO: The logo of British insurer Legal & General is seen at its offices in central London
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By Carolyn Cohn

LONDON (Reuters) -Legal & General is looking at direct investments outside Britain as well as in its domestic market, its chief executive said on Wednesday, as the insurer and asset manager beat estimates for first-half profit and signalled a strong full year.

The life insurer is one of the largest investors in the UK stock market and also makes direct investments, such as its ownership of housebuilder CALA Homes.

"We are one of the biggest believers in the UK, we've been going down the urban regeneration route," CEO Nigel Wilson told Reuters.

"We are looking outside the UK now," he added, saying that in addition to Britain, there could also be opportunities for investing in real estate or other businesses in countries such as the United States and Canada.

Insurers have been recovering from pandemic-related hits to their profits.

L&G said it had benefited from a bounce-back in the UK housing market and that it expected "double-digit growth" in operating profit for 2021. It also had strong sales of life insurance products such as individual annuities, which provide pensioners with a fixed income.

First-half operating profit rose 14% to 1.08 billion pounds ($1.50 billion), compared with the 999 million pounds estimated by analysts, according to a company-supplied consensus poll.

L&G's shares rose 1.8% to 268.6 pence per share at 0723 GMT, putting them among the top 10 performers in the FTSE 100. Barclays analysts described the results as "solid", reiterating their "overweight" rating on the stock.

L&G said it had previously provisioned for 110 million pounds of future COVID-19 related claims, of which around 30 million remained unused at end-June.

Legal & General Investment Management saw net inflows of 27.4 billion pounds. Its assets under management rose 7% to 1.3 trillion pounds.

L&G said it would pay an interim dividend of 5.18 pence per share, up 5% and above a forecast 5.14 pence.

($1 = 0.7182 pounds)

(Reporting by Carolyn CohnEditing by Rachel Armstrong and Anil D'Silva)

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