Total sales in the nine months to September reached £508m, down 53% compared to the first nine months of 2013.
However, they reported growth in all divisions, with net cash up 12% at £827m.
The company combatted reduced individual annuity sales with record bulk annuity transactions, increasing 29% to £3,368m. In addition they completed the internal transfer of £1,953m of annuities from with-profits to their shareholder fund in July, bringing the total volume of annuity business to £5,829m Q3 YTD.
Total annuity assets therefore increased by 16% to £39.9bn with annuity sales increasing 5% to £3.9bn and reflecting net flows of £2.3bn Q3 YTD.
Operational cash generation for the group is up 8% to £844m in the first nine months of the year, which they put down to improved efficiency and increasing scale in UK Protection and Savings.
The report also stated:
"As a leading and long-standing DB pension fund manager we have positioned our business to capitalise on the derisking trend of assets backing UK defined benefit pension schemes.
"LGIM, as the largest manager of UK DB pension scheme assets with a circa 20% market share, was an early identifier of the de-risking trend and now has a circa 40% market share of the UK LDI market.
"We expect demand for our LDI strategies to remain strong and further outflows of Index assets managed on behalf of UK DB clients. We are creating differentiated new products targeted at the emerging growth in UK defined contribution savings, capitalising on auto-enrolment."
Nigel Wilson, Group Chief Executive, said:
"We are growing our revenues, operating profit, customers and net cash and are continuing to deliver strong ROE.
"LGR completed a record £3.9 billion of annuity sales in the nine months to September, which coupled with an internal transfer in Q3, increased total annuity transactions to £5.8 billion. Of this, only around £0.5 billion was from the individual annuity market. To date in Q4, LGR has secured a further £0.8 billion of bulk premium and our immediate pipeline gives us high confidence in writing around £8 billion in total annuity transactions for the full year, double our total annuity premium for 2013.
"Over the last year LGIM's total assets increased by £82 billion from £594 billion to £676 billion. International assets now exceed £86 billion, and have trebled in the last four years. We experienced net outflows in our UK index business, these were more than offset by strong demand for our market leading LDI strategies.
"Our UK Insurance businesses delivered another strong performance, with Retail Protection growing its sales by 18%. Workplace Savings passed the £10 billion AUA milestone and Cofunds AUA in the last year increased by £11 billion to £69 billion.
"Direct investments total £4.6 billion and we are committed to our £15 billion target over the medium term. CALA, LGC's principal investment in UK house building, achieved record profits and is on track to treble its sales to £800 million by 2016.
"We remain confident in our ability to deliver economically and socially useful products for our customers and strong and sustainable growth for our shareholders. Recent market volatility is a reminder of the on-going market uncertainty that still exists and whilst no model can be completely immunised, we believe our strategy creates a high degree of resilience."
