(Adds detail, CFO comments)
LONDON, March 4 (Reuters) - British life insurer Legal &
General posted an above-forecast 12% rise in 2019
operating profit to 2.1 billion pounds ($2.69 billion) on
Wednesday on record company pension deals and said it saw
similar levels of that business in 2020.
L&G has increasingly focused on bulk annuities - insuring
company final salary, or defined benefit, pension schemes.
Many schemes are in deficit and companies are looking to
offload them to clean up their balance sheets.
Bulk annuity sales at Britain's third-largest insurer,
including several jumbo transactions such as a 4.6 billion pound
deal for Rolls-Royce, reached 11.4 billion pounds, up 25% from a
year earlier.
Consultants have said the UK bulk annuity market, which
totalled more than 40 billion pounds last year, was likely to be
smaller this year as the pipeline contains fewer large deals.
But L&G Chief Financial Officer Jeff Davies told a media
call he saw similar volume for the overall market and for L&G.
"We see good demand out there," Davies said.
Legal & General's solvency ratio, a key measure of its
capital strength, has fallen 10 percentage points to 174% this
year to Feb 28 due to market movements on the coronavirus
epidemic, Davies said.
But he said L&G had "very little" exposure to the virus.
"We prepare and plan for a whole range of different
scenarios both in terms of mortality and the market, the market
is the big focus."
Operating profit beat a company-supplied consensus forecast
of 2 billion pounds.
L&G, one of the biggest investors in the UK stock market,
said assets under management rose 18% to 1.2 trillion pounds.
The company said it would pay a dividend of 17.57 pence per
share, up 7% and in line with forecasts.
($1 = 0.7806 pounds)
(Reporting by Carolyn Cohn, editing by Huw Jones)
Legal & General (LGEN)
