Legal & General confirms five-year targets

The IFRS 17 global accounting standard for insurers came into effect at the start of this year. But L&G said its transition to the new standard was an accounting change only, and did not affect “our strategy, solvency or dividends”.

It continued: “It only impacts the reporting of our annuity and protection businesses, changing the timing of recognition of earnings from these products but not the quantum.”

The blue chip financial services firm said it therefore remained on track to achieve its five-year ambitions, including generating £8bn-£9bn of capital between 2020 and 2024. It also expects to grow earnings per share faster than dividends per share, and cumulatively for net surplus generation to exceed dividends.

The dividend remains on track to grow by 5% per annum to the 2024 full-year, it added.

The group also said it had transacted on £6.8bn of pension risk transfer in the year-to-date, with £5bn completed by the half year. “There has been a step-up in the number of pension schemes approaching the insurance market, alongside an increase in £1bn+ transactions, with several more such pension schemes intending to completes transactions this year.

“The pipeline for 2023 is the largest we have seen, and we are on track for one of our busiest years ever.”

In retail, L&G said it had seen higher demand for individual lifetime and fixed term annuities, as rising interest rates pushed up the rates on offer.