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Legal & General raises dividend with profits boost

INSURER Legal & General reported forecast-beating profit and has increased its dividend.

L&G, the country's sixth-biggest insurer by market value, said it had a 2009 operating profit of £1.3bn, ahead of the £1.1bn predicted by analysts.

The figures were helped by a £69m cost-cutting programme, with a cull of 17 per cent of the workforce.

L&G chief executive Tim Breedon said: "Today's results demonstrate the significant progress we continue to make in transforming the group into a lower cost, capital efficient, cash generative business.

"We expect modest growth in the UK economy in 2010. However, UK Risk and Savings markets which were depressed in 2009 are expected to rebound.

"These results show that Legal & General is in excellent health and is ideally placed to take advantage of new opportunities as they emerge in a financial services sector which is undergoing rapid change."

The insurer – which focuses mainly on the life and pensions market – is paying a total dividend of 3.84p a share.