INSURER Legal & General yesterday brought good cheer to the market despite posting a 6.6 per cent fall in worldwide sales, as it announced a strapping performance from its fund management arm and predicted a surge in new business in 2010.
L&G said worldwide new business sales dropped to £1.39bn, from £1.49bn in 2008, though the fall was in line with analyst expectations.
But the figure contrasted starkly with an impressive showing from Legal & General Investment Management (LGIM), where assets under management jumped to £315bn, from £264bn at the end of 2008. The division also attracted £31.5bn of new funds over the year, the second highest level of inflows in its history, despite volatility in the financial markets.
Shore Capital analyst Eamonn Flanagan described LGIM’s performance as “stunning”, adding that the business remains “an undervalued jewel in [L&G’s] crown”.
L&G chief executive Tim Breedon said the group expects only modest growth in the UK economy over 2010, though he remained buoyant on the group’s prospects.
“UK risk and savings markets, which were depressed in 2009, are expected to rebound,” he said.
L&G generated over £650m of cash in the UK over the year, over double the amount it made in 2008 and well ahead of its expectations. The group also eased investor concerns over its capital position by strengthening its so-called IGD surplus – the group’s capital buffer – to £3.1bn, from £1.9bn at the end of 2008.
L&G reported growth in its savings products, where new business rose three per cent to £907m. But it posted a decline in both risk products, where new business plunged by a quarter to £366m, and its international operations, where inflows fell three per cent to £115m.