There was a wealth of positivity emerging from insurance heavyweight Legal & General today as it announced its half-year results.
Not only did the insurance and investment company report a significant upswing in profits – it also suggested that any Brexit-associated blow to pension funds in the UK might not be as bad as first predicted.
Overall, the company enjoyed a 23% rise in profits for the six-month period with pre-tax profits swelling to £826 million – that’s up almost one quarter when compared to the same period during 2015 which stood at £672 million.
However, there was a caveat to the news – specifically related to the insurance sector. Whereas its retirement business saw profits climb by 44% to £406 million, there was actually a decline from its insurance arm. Insurance profit fell by £48 million to £138 million which the company stated was “primarily as a consequence of a c.£40 million lower expected release from the UK Protection back book, adverse mortality experience of £18 million (H1 2015: £5 million positive), mainly in our Group Protection business, and the introduction of the annual Flood Re levy for our General Insurance business of £9 million, the cost of which was expensed in H1 2016.”
Speaking about the outlook for the global markets, CEO Nigel Wilson outlined that it is difficult to predict.
“There are many different views of the outlook for economic growth, the state of financial markets and political uncertainty,” he said.
“We reflect this in our approach to risk management. While we cannot be immune to this uncertainty, we remain confident that we will continue to deliver attractive returns for shareholders, great value to customers and better outcomes for society. Our five long-term growth drivers, ageing populations, globalisation of asset markets, creating real assets, welfare reform and digital remain unaffected and will continue to provide many growth opportunities.”
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