Insurer Legal & General hailed recent efforts to ramp up expansion plans as it posted a 13% hike in half-year profits and said annuity sales surged 44%.
The life and pensions giant reported pre-tax profits of £592m for the six months to June 30, boosted by acquisitions and the sharp rise in sales of individual retirement annuities.
Chief executive Nigel Wilson said the group was “successfully evolving our strategy” to accelerate growth, having recently bought online investment platform Cofunds, teamed up with Patron Capital Partners to snap up Scottish housebuilder Cala Group and unveiled a deal to acquire annuity buy-out firm Lucida, which will add £1.4bn in assets.
Shares rose 3% as L&G also pleased investors with a 22% increase in its interim dividend payout.
Analysts at Killik & Co praised a “very strong performance”, with double-digit growth in sales and profits.
Barrie Cornes, insurance expert at Panmure Gordon, added that Legal & General Investment Management (LGIM) was “firing on all cylinders” as the asset management arm saw operating profits rise 13% to £135m.
L&G saw earnings from its annuity business rise 9% to £151m, boosted by the rise in individual sales and major group annuity deals.
The group said workplace pensions business was boosted by the Government’s programme to automatically place employees onto retirement schemes.
The roll-out of auto-enrolment, which first came into force for larger businesses last October, saw half-year workplace savings sales nearly double to £329m from £170m a year earlier.
Auto-enrolment also helped sales of protection products through company schemes rise by 44% as it sparked an increase in take-up of workplace death-in-service cover as more employees joined pension plans.
L&G added that more than 90% of auto-enrolled pension savers had remained with their schemes.
Housing and protection insurance profits rose 12% to £168m, although savings earnings dropped 14% as it said the market remained in a “transition phase” after the Retail Distribution Review (RDR) shake-up, which came into force on January 1 banning commission payments to independent advisers.
It said adviser activity is starting to increase again following RDR.
L&G confirmed plans to make more direct investments following its recent acquisitions and “play a major role in supporting economic and social development”.
The group hopes to take advantage of the clampdown in financing among banks by using its own capital to invest in a range of areas, such as transport, infrastructure and school building projects.