INSURANCE and investment group Legal & General (L&G) increased profit by six per cent in the first half of 2015, despite being hit by a 62 per cent decline in annuity sales.
The company’s pre-tax profit increased to £672m, up from £636m, and L&G Investment Management grew its assets under management by 12 per cent to £715bn, compared to £640bn in the first half of last year.
L&G Retirement was hurt by changes to annuity rules, with individual annuity sales down by 53 per cent in the period, and the company said it expects the market to decline further. However, operational profit in the division grew by 49 per cent, from £188m in the first half of 2014 to £280m.
The retirement arm was helped by L&G’s purchase of lifetime mortgages provider Newlife Home Finance, which completed in April.
The group reported lifetime mortgages sales of £37m in the year to date, and said its target for the year has been doubled – the firm plans to write £200m of lifetime mortgages in 2015.
L&G boss Nigel Wilson said the company was continuing to deliver strong growth in the UK and the US, and that the firm is “disposing of, or closing non-core businesses and reducing costs in real and nominal terms”.
The company sold its Irish business earlier this year, has agreed the sale of its Egyptian and Gulf arms, and is in talks concerning the disposal of its French insurance business.
“The actions that we are taking allow us to focus on our chosen markets, enable us to continue to deliver low prices and better value for our increasing customer base and deliver attractive returns for our shareholders,” added Wilson.
Shares in L&G were up by 2.77 per cent yesterday.