Life insurer and wealth manager Legal & General (LGEN) is heading for a strong year after growth was reported (4 Nov) across its business in the third quarter. Indeed, management expect to write a record £8 billion of annuity premiums by the end of December.
In the nine months to October the £13.6 billion cap sold £3.4 billion worth of corporate annuities where it assumes a company’s pension liabilities. This offset a 61% decline in demand from individuals where £125 million worth of annuities were sold in the third quarter. This is half the figure sold in the same quarter a year earlier and is the result of the government allowing investors to have more say in how to fund their twilight years by abolishing compulsory annuity buying.
Legal & General collected 12% more cash from its operations year-on-year at £827 million. This will whet investors’ appetite for a higher dividend. A month before these latest results were published Oriel Securities forecast that the stock would pay 10.4p a share, putting it on a prospective 4.4% yield.