Legal & General’s first half profits received a £126m boost from changes to life expectancy. The long term trend of improvements in life expectancy has slowed down recently, which is good news for life insurers which pay out more the longer a person lives.
Legal & General said that it had released the sum from its reserves following a review of mortality assumptions.
The boost helped the group’s first half operating profits to jump by 27 per cent to £988m.
The company increased its dividend by 8 per cent to 4.3p per share.
Legal & General said that it had written £1.7bn of bulk annuity business – in which it takes on pension promises from corporate schemes – in the first half, more than double the amount in the same period last year.
Asset under management at LGIM, the investment management business, rose 13 per cent to £951bn.
Chief executive Nigel Wilson said:
Our consistently improving financial performance is due to: investing for the long term in our market leading businesses, excellent execution by my colleagues and delivering value for customers.
Our strategy, based around six long term macro and demographic growth drivers, not only allows us to grow L&G’s business, but also the scale of our long term capital enables us to support inclusive growth across the UK. We are replicating our successful UK model with measured expansion in the US, where we are experiencing increasing customer acceptance and an ever improving financial performance.