L&G reports H1 2016 bulk annuity volumes of £3.6bn ahead of Brexit vote
Legal & General today reported first-half 2016 bulk annuity volumes of £3.6bn, up from £2.4bn a year earlier, and said the business saw minimal disruption around the UK’s Brexit referendum.
Legal & General added that it had a strong pipeline of bulk annuity transactions following the half-year, supporting continued growth in its retirement business.
The first-half figures were underpinned by completion of the £2.9bn acquisition of Aegon UK’s annuity back book, which transferred a large block of in-force liabilities onto Legal & General’s balance sheet. Aegon said the transaction structure involved the initial reinsurance of £3bn of liabilities to Legal & General, followed by a Part VII transfer.
Legal & General’s recent bulk annuity activity followed what it described as the UK’s largest medically underwritten bulk annuity deal, a £230m transaction for Kingfisher completed in December 2015.
For the full year 2016, Legal & General Retirement (LGR) reported new annuity sales of £7.0bn, an increase of 155% year-on-year. LGR new business across the segment totalled £8.5bn for the year, compared with £2.9bn in 2015.
LGR annuity assets rose 25% over 2016 to £54.4bn, from £43.4bn at the end of 2015, reflecting the strong flow of new business and back-book acquisitions.
Legal & General said the increase in release from operations for 2016 was consistent with guidance it had issued in August 2016. The group reported that Solvency II new business strain was less than £100m in a year when it wrote a record £7bn of new annuity business. It added that UK annuity sales delivered a 10.4% new business margin on Solvency II capital over the period.
Legal & General noted that the H1 2016 figures excluded a £4m profit arising on a disposal. Group chief executive Nigel Wilson led the presentation of the 2016 results.
--- Sources: https://www.legalandgeneral.com https://group.legalandgeneral.com/media/w33f4ybz/2016_half_year_presentation.pdf https://group.legalandgeneral.com/media/n1dpcfjp/full_year_results_2016.pdf
