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L&G is upbeat but sales fall

LEGAL &amp; GENERAL (L&amp;G) saw new business sales fall 5.4 per cent over the past quarter but the trimmed-down insurer said it was now positioned to capitalise on a &ldquo;modest recovery&rdquo; in the UK economy in the months ahead.<br /><br />L&amp;G said new business totalled &pound;312m in the three months to September compared to &pound;330m in the same period a year ago. Over the past nine months new business at the UK&rsquo;s fourth biggest insurer has slipped seven per cent to &pound;1.06bn.<br /><br />The result was right in line with what the City expected. ING analyst Kevin Ryan said: &ldquo;It all seems to be going in the right direction&rdquo;.<br /><br />L&amp;G chief executive Tim Breedon, who has cut 900 staff this year &ndash; more than 10 per cent of the company&rsquo;s workforce &ndash; said slashing costs struck a positive note on the outlook for the insurer. He said: &ldquo;Confidence is slowly returning to the economy. We see modest recovery in the UK going forward. The actions we have taken this year mean that our businesses are well placed to capitalise on future market growth and continue to deliver strong net cash generation.&rdquo;<br /><br />Breedon said internal targets of &pound;450m in new cash generation and &pound;50m in cost savings had been exceeded with a quarter of the year left. L&amp;G said its capital position remains strong, with a capital surplus at &pound;2.5bn, up from &pound;1.9bn at the end of June but lower than the &pound;2.9bn it held at the same stage last year.<br /><br />Legal &amp; General Investment Management added new funds worth &pound;8.85bn in the third quarter, 15.4 per cent lower than the &pound;10.46bn a year ago. <br /><br />Breedon said that L&amp;G, whose shares rose 25 per cent in a single week in October on takeover speculation, was sceptical of the benefits of consolidation in the UK insurance industry. He also reiterated that the group had no plans whatsoever to sell its fund management arm.