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Legal & General Group PLC on Friday said its pension risk transfer business has continued to ‘perform strongly’ with recent new-business wins.
Legal & General is a London-based life insurance and financial services company.
Year-to-date, the pension risk transfer business, Legal & General Retirement Institutional, has transacted or is in exclusive negotiations on £9.3 billion of global PRT business, exceeding the 2021 figure of £7.2 billion of global PRT secured. L&G said.
‘We are on track to deliver another strong PRT result this year and a record year for our international PRT business. We have continued to source high-quality assets at attractive yields throughout the second half of the year’, L&G said.
Moreover, the company said its UK annuity portfolio has continued to be resilient to market moves and has not experienced any difficulty in meeting collateral calls. It expects the portfolio to be ‘self-sustaining again in 2022’.
Looking ahead, Legal & General said it expects to deliver operating profit growth for 2022 to be in line with the 8% delivered in the first half, with annual capital generation expected at £1.8 billion. In the first half, operating profit was £1.16 billion, up 7.4% from £1.08 billion the year before.
Additionally, Legal & General noted UK Chancellor Jeremy Hunt's references in Thursday's autumn budget statement to Solvency II reform, saying that it believes the proposals represent a ‘positive step forward’.
Especially, L&G welcomed the primary proposals to ‘reduce the risk margin for long-term life insurance business by 65%, maintain the existing methodology and calibration of the fundamental spread, and broaden the matching adjustment eligibility criteria to include assets with highly predictable (as opposed to fixed) cashflows.’
It estimates its solvency coverage ratio of between 225% to 230% as at November 11.
Back in August, L&G had said its pretax profit in the half-year that ended on June 30 advanced 2.8% to £1.44 billion from the £1.40 billion a year before. Operating profit improved 7.5% to £1.16 billion from £1.08 billion, led by strong performances from its Retirement Institutional and Retail businesses.
Shares were up 2.4% at 259.59 pence each on Friday morning in London, outperforming the wider FTSE 100 index, which was up just 0.2%.
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