Legal & General has reported an increase in operating profit of 54% across its retirement division to £1.25 billion in 2017.
The insurer said this rise was driven by strong business performance in both its institutional and retail divisions, and a £332m mortality assumption update. Operating profit excluding the mortality release is up 13%.
This performance has led to year-on-year growth of 7%, with assets now totalling £58.2bn, up from £54.4bn.
L&G also saw new business sales rise across both sides of the retirement business, totalling £6.4bn.
In the retail division, individual annuity sales increased by 78% to £671m, the highest volume since 2014, while lifetime mortgage sales broke through the £1bn barrier, with sales up by 62% from £620m. Since Legal & General’s entry into the lifetime mortgage market in 2015, the company’s retail retirement division now has a 33% share of the market.
On the institutional side of the business, Legal & General Retirement closed 31 buy-ins and buy-outs, totalling £3.4bn, representing a market share of 27%. The largest overall market deal in 2017 was the £1.2bn buy-in of the Pearson Pension Plan, one of the company’s long-standing clients. The division also completed 15 US Pension Risk Transfer deals totalling £543m and a longevity insurance transaction of £800m.
Chris Knight, CEO, Legal & General Retail Retirement, said: “Our retail division delivered a great set of results in 2017. What’s more, we achieved this by staying true to our values and putting customers first, which included taking extra care of vulnerable people in order to make sure they have access to the best financial solutions to suit their circumstances.
“Our ultimate mission is to help people lead great lives in retirement. We’re also working with colleagues across L&G and with external partners to encourage people to start retirement planning earlier in life. We’re now making a real difference to over half a million customers, looking after £20bn of their assets.
“With at least 700,000 people coming to retirement age each year and approximately £1.5trn of housing equity owned by the over-60’s, I look forward to both growing the market and our share of it in 2018 and beyond.
“At Legal & General, we are aware that different solutions suit different customers, which is why we offer a wide variety of choice to ensure that each and every individual receives the right guidance and reaches the decision that is best for them.
“The 2017 results are a testament to our commitment to helping people enhance the quality of their lives in retirement. “