Legal & General Group has reported strong growth in its retirement division as part of its half year results.
The insurer said it had seen a 6 per cent growth in this retirement division, against a 2 per cent increase in its overall operating profits.
Legal & General said it had made good progress on its strategy, particularly in relation to establishing a single global asset management division, focused on both public and private markets funds.
It singled out the progress it has made in the private markets space by launching a new fund for the DC sector, offering schemes exposure to this asset class. It also cited its new fund that will leverage pension capital to build new homes.
Overall its half year results show core operating profit had grown in line with guidance to stand at £849m. This compares to £844m for the same period last year.
However the results also show that pension transfer risk business volumes were initially lower than expected.
Legal & General Group CEO, António Simões says: “These results reflect the ongoing strength of our business, with core operating profit slightly ahead of the prior year and a solvency coverage ratio of 223 per cent. We continue to expect 2024 core operating profit to grow by mid-single digits year-on-year.
“We are making clear progress on delivering our strategy, notably in the establishment of a single asset manager. We have good momentum in private markets, launching a new fund to offer diversified exposure to defined contribution pension scheme members, and establishing our affordable housing fund, leveraging pension capital to build new homes.
“These developments are important steps forward for L&G, reflecting our commitment to helping address the long-term investment needs of individuals and society, and create compelling opportunities for partners to invest alongside us to generate positive change.
“We are encouraged by the action being taken here in the UK to drive institutional capital towards productive assets, alongside progress on addressing structural barriers to investment, such as the planning system”
Commenting on these result, Tom Gilbey, equity research analyst at Quilter Cheviot adds: “While pension risk transfer (PRT) volumes were initially lower than expected, the company has noted an uptick and annuity sales remain variable.
“In terms of division performance, the retirement division saw a 6 per cent growth in operating profit, while the asset management division experienced a 14 per cent decline.”