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Legal & General on track for exceptional year with retail annuity sales up by 48% YTD
Legal & General’s retail annuity sales have grown by an average of 17% per year between 2015 and 2022, with sales up by an impressive 48% in 2023.
12 Dec 2023
- Sales have grown by an average of 17% per year between 2015 and 2022
- Legal & General overall lifetime annuity market share triples from 6.5% to 20.2% since 20161
Legal & General’s retail annuity sales have grown by an average of 17% per year between 2015 and 2022, with sales up by an impressive 48% in 2023. Current sales are £1.28bn, compared to £862m for the comparable calendar point in 2022.
Legal & General is one of the market leading retail annuity providers having invested significantly in its digital customer journey, in-house underwriting expertise and distribution capability in recent years, which have been fundamental to its success. Sales through its intermediated business have more than doubled, with annuities increasingly seen as a bedrock of holistic retirement planning.
The firm offers a broad market proposition, including fixed term annuities and lifetime care plan alongside its lifetime annuity, enabling it to meet the diverse needs of both customers and intermediaries.
The business’ overall lifetime annuity market share has more than tripled from 6.5% to 20.2% since the start of 2016 and its fixed-term annuities book saw sales increase by over 100% this year. The exceptionally high annuity volumes were written at strong margins enhancing Solvency II New Business Value Add (NBVA) and IFRS 17 Contractual Service Margin (CSM).
Nigel Wilson, outgoing Chief Executive, Legal & General: “The annuity market underwent a dramatic shift after the introduction of pension freedoms, falling by over 60%, leading many firms to exit or consolidate2. Rising interest rates have sent demand soaring in 2023 and, with workplace defined contribution assets set to double over the next decade, we can expect to see this momentum continue as retirees seek to diversify their income sources."3
Lorna Shah, Managing Director, Retail Retirement, Legal & General: “As the economic environment has changed in recent years, we have been ideally placed in Retail Annuities to capitalise on the opportunity, due to our continued investment in the business. Our strong sales reflect our responsive pricing, broad proposition and wide distribution reach: providing more customers with certainty and peace of mind in a volatile market.”
References
1 ABI Report, Q3 2023
2 The UK Annuity Market: Facts and Figures, 2014 and ABI Report, 2016
3 Navigator, UK Defined Contribution and Retirement Income Report, 2022
Further information
Joss Rein
PR Manager - Retail Retirement
Legal & General Retail Retirement
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 management (as at FY23) of which c40% (circa £0.5 trillion) is international.
We have a highly synergistic business model, which continues to drive strong returns. We are a leading international player in Institutional Retirement, in Retail Savings and Protection, and in both public and private markets through our Asset Management division. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
As at 7 June 2024, we estimate the Group’s Solvency II coverage ratio to be 224%.
As at 11 June 2024, Legal & General has a market capitalisation of £14.6 billion.
Legal & General Retail helps create brighter financial futures for all our customers. The division covers the savings, protection and retirement needs of our c.14 million retail policyholders and workplace members.
In 2023, we had total individual annuity sales of £1,431 million, and issued £299 million of Lifetime Mortgages and Retirement Interest Only Mortgages. Our Workplace pension platform served 5.2 million members, while our Protection businesses gave peace of mind to several million direct, group and US customers, taking in £1,991 million of UK and $1,584 million of US gross written premiums.