Legal & General misses forecasts as annuities slide

City A.M. Reporter
BRITISH insurer Legal & General narrowly missed sales forecasts for the first-quarter yesterday, held back by a weak annuities market, and said it was on course to beat its 2011 cash generation target.

L&G had total sales of £433m in the first-quarter, an increase of 12 per cent on the same period last year, Britain’s fourth-biggest life insurer announced yesterday.

Analysts had expected sales of £442m, according to a consensus analyst forecast calculated by the company.

The decline reflected a weaker performance in annuities, with total sales down 43 per cent, as L&G sold fewer bulk annuities to companies seeking to fund their staff pensions.

Annuity sales to individuals also fell, following a one-off surge a year ago triggered by an increase in the minimum retirement age that took effect in April 2010.

“This is a pretty good set of numbers, but they’re running into profit-taking on a relatively weak day for the market,” said Berenberg Bank analyst Trevor Moss.