Legal & General hopeful of UK market recovery

Insurer Legal & General forecast a rebound in its core UK markets today after revealing a 7% drop in worldwide sales during 2009.

The group predicted a slow UK economic recovery and subdued housing market, but said its savings and protection and annuities sectors were still expected to rally following a depressed previous year.

It has secured new distribution arrangements with Saga, Skipton Building Society and Northern Rock in an effort to boost sales.

Legal said it traded ahead of expectations in 2009 after it increased efficiency and focused new business activity on the markets it considers to be the most attractive in terms of growth potential.

A £50m (€57,3m) cost savings target was exceeded by £15m (€17m) and the company generated more than £650m (€744m) of cash from its UK business, well in excess of the £450m (€516m) targeted at the start of the year.

Chief executive Tim Breedon said favourable pricing conditions in the annuity market and substantial growth in assets under management also contributed to the company achieving a performance well ahead of expectations.

Worldwide new business sales of £1.38bn (€1.6bn) were down 6.6% on a year earlier, but this was in line with market forecasts.

Legal & General shares were more than 3% higher today.

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