Press releases

2020 Results: Resilient operating earnings (£2.2bn) and a robust balance sheet deliver 17.3% ROE; performance provides good start to new 5 year ambitions

We remain committed to Inclusive Capitalism as we support our customers, our people and communities in the face of COVID-19

10 Mar 2021

Full press release and analyst pack

Nigel Wilson, Group Chief Executive: "Legal & General delivered a robust and resilient performance for all stakeholders, providing stability to our people, customers and shareholders. Our balance sheet remains strong, with the Solvency II coverage ratio currently over 190%, and trading remains consistent with delivering our growth ambitions which are supported by six long term growth drivers. Our commitment to Inclusive Capitalism, ESG and investing in climate change means we intend to play an important role in the post pandemic recovery."
Financial highlights1
  • Operating profit2 broadly flat at £2,218m (2019: £2,286m), with 3 of 5 businesses delivering growth
  • Operating profit excluding mortality reserve release down £90m to £2,041m (2019: £2,131m), with the reduction driven by specific COVID-19 estimated impacts of £(228)m3
  • Profit after tax4 down 12% to £1,607m (2019: £1,834m), principally reflecting the formulaic impact of lower interest rates on LGI and the unrealised impact of market movements, partially offset by profit on disposal from our Mature Savings business
  • Return on equity of 17.3% (2019: 20.4%), resilient in light of market volatility
  • Despite COVID-19 we delivered financial metrics in line with our five year ambitions (2020-2024):
    ▪ Full year dividend of 17.57p per share (2019: 17.57p)
    ▪ Net release from operations of £1,539m (2019: £1,597m)
    ▪ Solvency II operational surplus generation from continuing operations of £1.5bn (2019: £1.5bn)
Business highlights

We remain committed to Inclusive Capitalism as we support our customers, our people and communities in the face of COVID-19.

Our businesses continue to perform resiliently:

  • LGRI global Pension Risk Transfer (PRT) new business premiums of £8,843m, including record US PRT volumes of $1,614m (2019: £11,392m; $1,140m)
  • LGRR annuity premiums of £910m (2019: £970m), initially impacted by COVID-19, but recovering to be up 3% during H2 compared to prior year
  • LGC Direct Investment origination of £0.6bn, with AUM growth of 9% to £3.1bn (2019: £2.9bn)
  • LGIM external net flows of £20.4bn, with AUM up 7% at £1,279bn (2019: £86.4bn; £1,196bn)
  • LGI new business annual premiums up 10% to £372m, supporting £2,849m gross written premiums (2019: £339m; £2,729m)

Our balance sheet is robust:

  • Solvency II coverage ratio5 of 177% (2019: 184%) and as at 5 March 2021, we estimate the ratio was 192%6
  • Our traded credit portfolio (excluding gilts), which is actively managed, has had no defaults and has seen net
    downgrades to sub-investment grade of 0.9% during 2020; just half of that experienced by the index. Our £3.5bn IFRS Credit Default Reserve has remained unutilised
  • 99.9% of scheduled cash-flows on our annuity portfolio’s direct investments were paid during the year, reflecting the high quality of our counterparty exposure

  1. The Alternative Performance Measures within the Group’s financial highlights are defined in the glossary in the report.
  2. Including mortality reserve releases (2020: £177m, 2019: £155m). 2020 mortality release of £177m from LGR’s £51.8bn of net longevity exposure relates to changes in longevity improvement assumptions to align to CMI 2018 tables, adjusted to reflect our annuitant portfolio.
  3. Specific COVID-19 impacts of LGRI and LGRR (+£85m combined); LGC (-£100m); LGI (-£186m, which includes -£110m reserve increases for potential future COVID-19 claims); and Group Costs (-£27m). 
  4. Profit after tax attributable to equity holders.
  5. Solvency II coverage ratio on a shareholder basis, which is adjusted for the Own Funds and SCR of the With-profits fund (2019 only) and the Group final salary pension plans. Incorporates the impact of recalculating the Transitional Measures for Technical Provisions (TMTP) as at 31 December 2020.
  6. Coverage ratio before payment of the 2020 final dividend.

Further information

EH photo.jpg

Ed Houghton

Group Strategy & Investor Relations Director

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Sujee Rajah


Investor Relations


John Godfrey

Director of Levelling Up (2006 - 2023)

Group Communications

T: 020 3124 2090

Email John Godfrey

Notes to editors

Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with £1.2 trillion in total assets under management1 of which 40% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.

1Data as at 31 December 2023.