British life insurer Legal & General stormed ahead of City forecasts to post a record year for new business - increasing annual sales by nearly a third to £1.3 billion.
But the shares still lost more than 0.5 per cent in a rising market in what some observers attributed to profit taking and others said were concerns about L&G’s business mix.
Amid a FTSE 100 rally this morning, L&G shares were down 1p at 126.25p amid healthy trading volumes of 12.75 million shares.
L&G has a market value of just under £3.8 billion.
Advertisement
After what new chief executive Tim Breedon described as a year of “remarkable growth” for L&G, Britain’s third-largest insurer took its new business from individual life insurance, savings, pensions and investment policies past the £1 billion mark during the year.
Mr Breedon said L&G had been boosted by the recovery in demand for savings and pension products in the UK. And he predicted further growth in the year to come.
“We expect the investment, savings and protection market in the UK to continue to grow in 2006. We believe that investor confidence will show further improvement and that a cautious upturn in the housing market will lead to a gradual recovery in protection volumes,” he said.
The strong showing by L&G, which has been growing gradually into a major force in the market for retail financial services, follows a 15 per cent sales increase to £2.5 billion posted yesterday by Prudential, the second-largest insurer.
Like most insurers, L&G reports its sales on an “annual premium equivalent” (APE) basis - a way of smoothing out potentially distorting large sales of single-premium policies such as annuities.
Advertisement
And in an echo of the Pru, which boasted a bumper success for its M&G fund management arm yesterday, L&G said its investment manager also had a record year for new business.
Legal & General Investment Management brought in £17.1 billion of new assets to manage last year, including nearly £7 billion in the fourth quarter.
New sales of life insurance and pensions to individuals rose by 16 per cent to £710 million, and sales of investment policies leaped 76 per cent to £315 million.
For detailed info on the shares click here