SHARES in Legal & General (L&G) fell 1¼p to 126p as investors took profits after the insurer reported record new business for last year.
Tim Breedon, the new chief executive, unveiled a 29 per cent increase in worldwide annual premium equivalent (APE) sales to £1.3 billion, beating the consensus forecast of £1.28 billion. APE is an industry sales measure, comprising regular premiums plus 10 per cent of new single premiums.
The insurer soothed investors’ fears that it may struggle to pay its dividend by moving away from capital- intensive individual annuities. Sales of individual annuities fell 16 per cent last year to £722 million, which Mr Breedon said was a strategic move. L&G made bulk annuity sales worth £877 million, up 95 per cent. Pensions sales rose 54 per cent year on year to £263 million APE, while savings products increased 47 per cent to £2.08 billion APE. Protection business — mainly mortgage-related insurance — fell to £91 million, from £109 million in 2004, as the housing market slowed.
Legal & General Investment Management, meanwhile, attracted a record £17.1 billion in funds under management. The insurer’s UK business made £1.18 billion in APE sales, with the international operations accounting for £109 million.
Mr Breedon said that L&G remained committed to its UK focus, despite speculation that its rivals were seeking acquisitions in the United States.