* 9mth net cash generation up 14 pct
* Assets under management up 8 pct
* L&G looking to international bulk annuities
* Shares hit 2-1/2 month high (Updates with quotes, prices)
By Carolyn Cohn
LONDON, Nov 4 (Reuters) - British insurer Legal & General 's net cash generation rose 14 percent in the first ninemonths of 2015, as the firm shifts focus from individual annuitysales, and assets under management rose 8 percent.
The announcement on Wednesday sent its shares higher.
British life insurers have been reinventing themselves afterpensions reform halved the sales of individual annuities, whichgive a fixed income for life and were a staple product for thesector.
L&G has moved into the bulk annuity market, taking on therisk of defined benefit, or final salary, pension schemes. Ithas also started offering lifetime mortgages, in whichhomeowners release money from their properties to fund theirretirement.
"The expansion of bulk annuity business internationally is abig strategic opportunity," Chief Financial Officer Mark Gregorytold reporters on a media call, after the firm announced itsfirst U.S. bulk deal last month.
"We plan to progress to enter the European market in thenext few months."
Gregory said the lifetime mortgage business had exceededexpectations, The firm has doubled its target for this year,aiming to write 200 million pounds in lifetime mortgages.
Net cash generation rose to 943 million pounds ($1.45billion) and operational cash generation rose 11 percent to 936million pounds.
Annuity assets rose 8 percent from a year earlier althoughsales fell in the third quarter.
"This is a lumpy business," Gregory said, explaining thedrop in large bulk deals over the quarter, though he added that "the pipeline remains very good".
Legal & General Investment Management's assets undermanagement rose to 717 billion pounds and external net inflowsrose 161 percent from a year earlier to 21.7 billion.
AUM were little changed from the previous quarter, in aturbulent period where asset managers such as Jupiter and Hargreaves Lansdown saw a drop in total value oftheir assets, despite net inflows.
Gregory said the firm's focus on index funds, whichpassively track the performance of an index, and on strategieswhich match investors' liabilities, had provided some shelterfrom the market storm.
"Legal & General reported another strong cash result," saidBernstein analysts in a note, reiterating their outperformrating on the stock and adding L&G "remains compelling".
Legal & General's shares rose 1.7 percent to a 2-1/2 monthhigh of 267 pence per share at 0827 GMT, compared with a 0.6percent rise in the FTSE 100 index.($1 = 0.6481 pounds) (Reporting by Carolyn Cohn; Editing by Tom Heneghan)