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Press release
06 Mar 2019

2018 results: Record £10bn annuity sales, AUM exceeds £1tn, operating profit up 10% to £1.9bn

Full press release (PDF 488KB)
2018 full results wide

Financial highlights2

  • OPERATING PROFIT1 OF £1,902M, up 10% (2017: £1,723m)
  • EARNINGS PER SHARE3 OF 24.74P, up 7% (2017: 23.10p) - impacted by reductions in asset markets
  • RETURN ON EQUITY AT 22.7% (2017: 25.6%)
  • FULL YEAR DIVIDEND UP 7% TO 16.42P PER SHARE (2017: 15.35P)
  • PROFIT AFTER TAX4 DOWN 3% TO £1,827M (2017: £1,891M) - prior year one-off US tax benefit of £246m
  • SOLVENCY II COVERAGE RATIO5 OF 188% (2017: 189%)
  • SOLVENCY II OPERATIONAL SURPLUS GENERATION UP BY 14% TO £1.4BN (2017: £1.3BN)

Business highlights
Investing & Annuities

  • LGR PENSION RISK TRANSFER SALES6 OF £9.1BN (2017: £3.9BN)
  • LGR INDIVIDUAL ANNUITY SALES UP 18% TO £795M (2017: £671M)
  • LGR LIFETIME MORTGAGE ADVANCES UP 19% TO £1.2BN (2017: £1.0BN)
  • GROUP-WIDE DIRECT INVESTMENT UP 34% AT £19.2BN (2017: £14.4BN)

Investment Management

  • LGIM AUM UP 3% AT £1,015BN (2017: £983BN)
  • LGIM EXTERNAL NET FLOWS OF £42.6BN (2017: £43.5BN)
    Insurance
  • LGI TOTAL GWP UP 3% TO £2,615M7 (2017: £2,531M8), INCLUDING US
  • GWP OF $1,299M (2017: $1,254M)
  • GENERAL INSURANCE GWP UP 11% TO £410M (2017: £369M)

1 Excludes mortality release of £433m (2017: £332m) from LGR’s £44.5bn net longevity exposure. 2018 mortality release relates to changes in longevity improvement assumptions to align to CMI 2016 tables. Including the reserve release, operating profit was up 14% to £2,335m (2017: £2,055m).

2 The Alternative Performance Measures within the Group’s financial highlights are defined in the glossary, on pages 91 to 96 of this report.
3 Excludes post-tax mortality release of £359m (2017: £274m), and a 2017 one-off US tax benefit of £246m. Including these impacts, EPS was down 3% at 30.79p (2017: 31.87p).
4 Profit after tax attributable to equity holders. Profit after tax attributable to equity holders was up 7% at £1,468m (2017: £1,371m) excluding mortality releases and the 2017 one-off US tax benefit.
5 Solvency II coverage ratio on a shareholder basis is adjusted for the Own Funds and SCR of the With-profits fund and the Group final salary pension schemes.
6 Excludes Longevity Insurance transactions (2018: £287m, 2017: £800m).
7 Constant FX rate comparisons have been calculated by applying the average FX rates for 2017 to both 2017 and 2018 local currency results. Based on actual FX rate, up 2% to £2,580m. Actual FX rate comparisons apply the 2017 and 2018 average FX rates to the equivalent periods’ results respectively.
8 Excludes Legal & General Netherlands which was sold on 6 April 2017.

Nigel Wilson, Group Chief Executive:

"2018 saw political uncertainty, asset market declines and slowing economic growth, but we are resilient and performed strongly. We became the UK’s first £1 trillion investment manager, executed a record £9 billion of pension risk transfer deals and invested billions in the UK’s future infrastructure and cities."

Notes to editors

Established in 1836, L&G 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 FY25) of which c. 43% (c. £0.5 trillion) is international. We have a highly synergistic business model, which continues to drive strong returns. We are a leading player in Institutional Retirement, in Retail Savings and Protection, and in Asset Management through both public and private markets. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.

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