Legal & General annual profit beats forecasts

Legal & General’s annual profit rose by almost a third to beat expectations as the insurer sold more retirement products and released £332m from its reserves.

Operating profit for the year to the end of December increased 32% to a record £2.1bn, driven by a 54% increase in profit at the company’s retirement business to £1.25bn. Group profit outstripped analysts’ average forecast of £1.9bn.

The retirement figure included a £332m release of funds triggered by more favourable mortality expectations. Excluding the mortality release, retirement operating profit rose 13%.

Profit also rose at L&G’s investment management business – up 9% to £400m – and its capital investment operation – up 6% to £272m.

Legal & General’s chief executive, Nigel Wilson, said: “Legal & General's strategic focus, alignment to global growth drivers and excellent execution allowed us to deliver a record operating profit in 2017. We are confident Legal & General will see continuing momentum in 2018, driven by the excellent execution of our strategy across our three business areas.”

The annual dividend rose 7% to 15.35p a share. Net profit jumped 50% to £1.9bn, boosted by a one-off gain of £246m triggered by President Trump’s changes to US tax law.

Investors were primed for a strong set of results after Legal & General reported accelerating momentum across its businesses on 6 March.