Individual annuity sales continued to drop by 62% to £1.3bn following the introduction of the pension reforms.
Individual single annuity premiums also fell by 53% to £180m, with L&G announcing that it expects the market to decline further.
However strong equity release sales of £37 million helped boost profits. Additionally, following its entry into the lifetime mortgage market, L&G announced that it has doubled its target and now expects to write £200m of lifetime mortgages new business this year. In its interim statement, the firm said it expects individual annuities sales to remain subdued, with the market remaining challenging both in respect of the Budget reforms and in light of regulatory change.
Nigel Wilson, Group Chief Executive, said:
“Legal & General continues to deliver strong organic growth in the UK and the US from both our developing and established, market leading businesses. In addition we are disposing of, or closing non-core businesses and reducing costs in real and nominal terms. The actions that we are taking allow us to focus on our chosen markets, enable us to continue to deliver low prices and better value for our increasing customer base and deliver attractive returns for our shareholders.
"This financial and strategic discipline is driving our sixth year of double digit growth in net cash, operating profit and dividends – particularly noteworthy in H1 was the diversity of the strong operational and financial delivery, with an 18% increase in operating profit to £750m, the 19% increase in dividend per share to 3.45p and the 19% ROE.”
