By Charlie Conchie
London insurance giant Legal and General said it would take a “fresh perspective” today after the firm missed market expectations and post-tax profit slumped over the past year.
In its full-year results this morning, the FTSE 100 firm said operating profit for the year stayed flat at £1.67bn, below the £1.75bn predicted by analysts.
Post-tax profit meanwhile slumped more than 40 per cent to £457m, down from £783m last year, on the back of a slump in investment performance which dragged on profit across its divisions.
The fall in operating profit was felt most sharply in the Legal and General Investment Management arm, where profit cratered from £340m to £274m after a tumultuous year for markets.
The firm said it had seen “record new business” in its pension risk transfer business however after a buy-in offensive over the past year, in which it has scooped up corporate defined benefit pension plans in the UK, the US, Canada and the Netherlands.
Legal and General boss António Simões said in a statement the firm was on track to hit its five-year growth plan despite the slowdown in earnings.
“We are on course to achieve our five-year targets, and demonstrated resilience in challenging markets to achieve record new business volumes in pension risk transfer, UK annuities and US protection, increasing our store of future profit,” he said in a statement.
The pension risk transfer marker has been booming as rising interest rates boost the funding position of corporate pension schemes and allow firms to offload their liabilities onto big insurers.
Simoes added that the firm expects to write circa £8-10bn per year of new pension risk transfer deals under typical market volumes in the UK alone.
The results mark the first full year results at the helm for Simões who took over from veteran chief Sir Nigel Wilson in June last year.
