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L&G reports 21 per cent increase in net cash generation with record sales

Legal & General (L&G) has reported a 21 per cent increase in net cash generation for the first three months of 2014 to GBP301m (Q1 2013: GBP249m).

The new business strain benefited from a positive new business surplus arising from the significant volumes of annuities and UK retail protection written in the quarter.
The net cash also includes the LGA 2014 ordinary dividend of USD73m, 11 per cent up on 2013, equating to GBP44m (Q1 2013: USD66m equating to GBP43m).
Nigel Wilson, group chief executive, says: “Legal & General delivered record results in Q1. Net cash and operational cash, up 21 per cent and six per cent respectively, are at their highest-ever levels. LGIM AUM of GBP463bn is at an all-time high, retail protection sales hit a new Q1 record and Cofunds grew AUA to GBP66bn. Our record annuity sales were driven by the UK’s largest ever bulk purchase annuity transaction, the GBP3bn deal for the ICI Pension Fund.
“We already benefit from favourable demographic trends; we have economically and socially useful products for customers; and with our LGIM economists forecasting three per cent plus economic growth in the UK and US, we are excited about the prospects for our business.
“There is strong demand for our pension de-risking and protection products in both markets – the GBP1.8 trillion of UK DB liabilities will provide substantial future business. We believe the UK DC market will grow from around GBP250bn today to GBP3 trillion by 2030. LGIM’s recent agreement to acquire Global Index Advisors (GIA), a US based DC provider will accelerate our US growth.  In Q1 we invested in UK infrastructure and housing at a rate of around GBP100m per week, completing GBP1bn of transactions including Cala’s acquisition of Banner Homes and a GBP252m investment in affordable housing provider Places for People which will finance 7,000 new homes.”

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