Insurance group Legal & General upped its dividend by a quarter in the first half, despite recording a £64m fall in pre-tax profits.Shares fell 1.73% lower to 107.80p at 09:54 on Wednesday morning.The firm paid out £97m to investors by way of an interim dividend, which was raised by 25% from 1.33p per share to 1.66p per share, driven by strong cash generation.In the six months to 30 June, operational cash generational grew by 19% from £98m to £417m.Pre-tax profit fell from £537m to £437m, while earnings per share fell from 6.9p to 6.16p. Nevertheless, an operating profit of £523m came in ahead of expectations of £508m.Operating profit in risk fell from £310m to £236m, driven by a reduction in "the positive new business strain in annuities, an increase in claims in group protection and the non recurrence of positive inflation modelling effects seen in the [first half of] 2010," the firm said.Legal & General Investment Management (LGIM) delivered a record half year operating profit of £117m, up from £98m previously. Meanwhile, record assets, sales, cash and profits were seen in the Savings division."We remain confident in our business model and strategy. Our leading market positions in UK savings, annuities, protection and asset management are delivering healthy returns for shareholders. Sales volumes continue to grow, and we are developing attractive new businesses both in the UK and internationally," said chief executive Tim Breedon."Despite the share price relative outperformance against the life sector in 2011 the share price is too low in our view. On all of our valuation metrics the share price appears attractive and following the focus on cash generation, profitability and the simplification of the business we believe that L&G is much more investable than it has been for many years," said Panmure Gordon analyst Barrie Cornes.BC