Legal & General Regulatory News (LGEN)

Active

Multi

Real

Total

Index

strategies

asset

Solutions2

assets

AUM

For the six month period to 30 June 2021

£bn

£bn

£bn

£bn

£bn

£bn

As at 1 January 2021

429.9

193.6

63.4

559.5

32.5

1,278.9

External inflows

44.5

10.0

4.9

20.2

0.6

80.2

External outflows

(41.9)

(7.7)

(3.1)

(8.0)

(0.8)

(61.5)

Overlay net flows

-

-

-

6.6

-

6.6

ETF net flows

2.1

-

-

-

-

2.1

External net flows3

4.7

2.3

1.8

18.8

(0.2)

27.4

Internal net flows4

(0.3)

(2.3)

0.1

(0.2)

1.0

(1.7)

Total net flows

4.4

-

1.9

18.6

0.8

25.7

Cash management movements5

-

(0.4)

-

-

-

(0.4)

Market and other movements3

37.1

(3.1)

2.8

(14.6)

0.4

22.6

As at 30 June 2021

471.4

190.1

68.1

563.5

33.7

1,326.8

Assets attributable to:

External

1,213.6

Internal

113.2

1. Assets under management (AUM) includes assets on our Investment Only Platform that are managed by third parties, on which fees are earned.

2. Solutions include liability driven investments and £345.3bn (30 June 2020: £348.3bn; 31 December 2020: £340.1bn) of derivative notionals associated with the Solutions business.

3. External net flows exclude movements in short-term Solutions assets, as their maturity dates are determined by client agreements and are subject to a higher degree of variability. The total value of these assets at 30 June 2021 was £51.5bn (30 June 2020: £62.3bn; 31 December 2020: £45.8bn) and the movement in these assets is included in market and other movements for Solutions assets.

4. Internal includes legacy assets from the Mature Savings business sold to ReAssure in 2020.

5. Cash management movements include external holdings in money market funds and other cash mandates held for clients' liquidity management purposes.

Active

Multi

Real

Total

Index

strategies

asset

Solutions2

assets

AUM

For the six month period to 30 June 2020

£bn

£bn

£bn

£bn

£bn

£bn

As at 1 January 2020

403.6

177.2

58.0

526.6

30.8

1,196.2

External inflows

27.7

9.5

4.3

10.9

0.6

53.0

External outflows

(32.3)

(9.0)

(2.7)

(22.7)

(0.4)

(67.1)

Overlay net flows

-

-

-

20.1

-

20.1

ETF net flows

0.2

-

-

-

-

0.2

External net flows3

(4.4)

0.5

1.6

8.3

0.2

6.2

Internal net flows

-

(0.2)

(0.7)

(0.1)

0.4

(0.6)

Total net flows

(4.4)

0.3

0.9

8.2

0.6

5.6

Cash management movements4

-

2.8

-

-

-

2.8

Market and other movements3

(4.1)

9.2

(1.8)

32.0

0.7

36.0

As at 30 June 2020

395.1

189.5

57.1

566.8

32.1

1,240.6

Assets attributable to:

External

1,134.9

Internal

105.7

1. Assets under management (AUM) includes assets on our Investment Only Platform that are managed by third parties, on which fees are earned.

2. Solutions include liability driven investments and £348.3bn of derivative notionals associated with the Solutions business.

3. External net flows exclude movements in short-term Solutions assets, as their maturity dates are determined by client agreements and are subject to a higher degree of variability. The total value of these assets at 30 June 2020 was £62.3bn and the movement in these assets is included in market and other movements for Solutions assets.

4. Cash management movements include external holdings in money market funds and other cash mandates held for clients' liquidity management purposes.

Active

Multi

Real

Total

Index

strategies

asset

Solutions2

assets

AUM

For the year ended 31 December 2020

£bn

£bn

£bn

£bn

£bn

£bn

As at 1 January 2020

403.6

177.2

58.0

526.6

30.8

1,196.2

External inflows

76.6

17.7

8.5

27.0

1.0

130.8

External outflows

(84.7)

(17.8)

(5.3)

(36.6)

(1.4)

(145.8)

Overlay net flows

-

-

-

33.9

-

33.9

ETF net flows

1.5

-

-

-

-

1.5

External net flows3

(6.6)

(0.1)

3.2

24.3

(0.4)

20.4

Internal net flows4

(0.2)

2.6

(0.4)

(0.3)

0.4

2.1

Total net flows

(6.8)

2.5

2.8

24.0

-

22.5

Cash management movements5

-

2.4

-

-

-

2.4

Market and other movements3

33.1

11.5

2.6

8.9

1.7

57.8

As at 31 December 2020

429.9

193.6

63.4

559.5

32.5

1,278.9

Assets attributable to:

External

1,162.6

Internal

116.3

1. Assets under management (AUM) includes assets on our Investment Only Platform, that are managed by third parties, on which fees are earned.

2. Solutions include liability driven investments and £340.1bn of derivative notionals associated with the Solutions business.

3. External net flows exclude movements in short-term Solutions assets, as their maturity dates are determined by client agreements and are subject to a

higher degree of variability. The total value of these assets at 31 December 2020 was £45.8bn and the movement in these assets is included in market and

other movements for Solutions assets.

4. Internal net flows include flows in legacy assets from the Mature Savings business sold to ReAssure in 2020.

5. Cash management movements include external holdings in money market funds and other cash mandates held for clients' liquidity management

purposes.

 Assets under management

Net flows2

30 Jun

30 Jun

31 Dec

30 Jun

30 Jun

31 Dec

2021

2020

2020

2021

2020

2020

£bn

£bn

£bn

£bn

£bn

£bn

International1

344.8

289.5

303.5

15.0

(3.2)

(1.0)

UK Institutional

- Defined contribution

125.5

96.7

112.7

4.4

5.5

5.6

- Defined benefit

689.6

706.7

699.4

4.6

2.5

7.7

UK Retail

- Retail intermediary

39.2

33.3

36.0

1.5

1.2

0.6

- Personal investing3

6.3

5.2

5.6

(0.2)

-

-

ETF4

8.2

3.5

5.4

2.1

0.2

1.3

Total external

1,213.6

1,134.9

1,162.6

27.4

6.2

14.2

1. International assets are shown on the basis of client domicile. Total International AUM including assets managed internationally on behalf of UK clients amounted to £434bn as at 30 June 2021 (30 June 2020: £385bn; 31 December 2020: £388bn).

2. External net flows exclude movements in short-term solutions assets, with maturity as determined by client agreements and are subject to a higher degree of variability.

3. Personal investing includes £1.6bn as at 30 June 2021 (30 June 2020: £1.4bn; 31 December 2020: £1.4bn) of AUM relating to legacy Banks and Building Society customers which is driving net outflows.

4. ETF reflects external AUM and flows invested on the platform. Total AUM managed on the platform is $13.0bn in H1 21 (H1 20: $4.8bn) and flows of $3.4bn (H1 20: $0.4bn) which include internal investment from other LGIM asset classes.

5.03 Reconciliation of assets under management to Consolidated Balance Sheet financial investments, investment property and cash and cash equivalents

30 Jun 2021

30 Jun 2020

31 Dec 2020

£bn

£bn

£bn

Assets under management

1,327

1,241

1,279

Derivative notionals1

(351)

(348)

(340)

Third party assets2

(441)

(399)

(419)

Other3

10

72

33

Total financial investments, investment property and cash and cash equivalents

545

566

553

Less: assets of operations classified as held for sale

-

(23)

-

Financial investments, investment property and cash and cash equivalents

545

543

553

1. Derivative notionals are included in the assets under management measure but are not for IFRS reporting and are thus removed.

2. Third party assets are those that LGIM manage on behalf of others which are not included on the group's Consolidated Balance Sheet.

3. Other includes assets that are managed by third parties on behalf of the group, other assets and liabilities related to financial investments, derivative assets and pooled funds.

Workplace1

Annuities2

Workplace

Annuities

Workplace

Annuities

30 Jun 2021

30 Jun 2021

30 Jun 2020

30 Jun 2020

31 Dec 2020

31 Dec 2020

£bn

£bn

£bn

£bn

£bn

£bn

As at 1 January

50.8

87.0

40.3

75.9

40.3

75.9

Gross inflows

7.5

3.7

3.3

3.8

10.0

10.1

Gross outflows

(1.5)

-

(0.9)

-

(2.2)

-

Payments to pensioners

-

(2.2)

-

(2.1)

-

(4.3)

Net flows

6.0

1.5

2.4

1.7

7.8

5.8

Market and other movements

3.4

(2.7)

(1.2)

3.1

2.7

5.3

As at 30 June/31 December

60.2

85.8

41.5

80.7

50.8

87.0

1. Workplace assets under administration as at 30 June 2021 includes £60.1bn (30 June 2020: £41.5bn; 31 December 2020: £50.7bn) of assets under management included in Note 5.01.

2. Annuities assets under administration as at 30 June 2021 includes £77.3bn (30 June 2020: £73.8bn; 31 December 2020: £79.4bn) of assets under management included in Note 5.01.

6 months

6 months

6 months

Full year

30 Jun

30 Jun

31 Dec

31 Dec

2021

2020

2020

2020

£m

£m

£m

£m

Pension risk transfer

- UK1

2,965

3,176

4,417

7,593

- US

107

248

1,002

1,250

Individual annuities

483

421

489

910

Lifetime & Retirement Interest Only mortgage advances

414

362

429

791

Total LGR new business

3,969

4,207

6,337

10,544

1. UK pension risk transfer includes a £925m (H1 20: £nil; H2 20: £397m) Assured Payment Policy (APP).

5.06 LGI new business

6 months

6 months

6 months

Full year

30 Jun

30 Jun

31 Dec

31 Dec

2021

2020

2020

2020

£m

£m

£m

£m

UK Retail protection

105

83

92

175

UK Group protection

55

65

52

117

US protection1

43

44

36

80

Total LGI new business

203

192

180

372

1. In local currency, US protection reflects new business of $59m for H1 2021 (H1 20: $56m; H2 20: $47m).

5.07 Gross written premiums on insurance business

6 months

6 months

6 months

Full year

30 Jun

30 Jun

31 Dec

31 Dec

2021

2020

2020

2020

£m

£m

£m

£m

UK Retail protection

714

680

694

1,374

UK Group protection

274

245

137

382

US protection1

512

550

543

1,093

Longevity insurance

152

159

168

327

Total gross written premiums on insurance business

1,652

1,634

1,542

3,176

1. In local currency, US protection reflects gross written premiums of $712m for H1 2021 (H1 20: $693m; H2 20: $710m).

(a) Capital position

As at 30 June 2021, and on the above basis, the group had a surplus of £7.5bn (31 December 2020: £7.4bn) over its Solvency Capital Requirement, corresponding to a Solvency II capital coverage ratio on a "shareholder view" basis of 183% (31 December 2020: 177%). The shareholder view of the Solvency II capital position is as follows:

30 Jun 2021

31 Dec 2020

£bn

£bn

Unrestricted Tier 1 Own Funds

12.3

12.3

Restricted Tier 1 Own Funds1

0.5

0.5

Tier 2 Subordinated liabilities2

4.3

4.5

Eligibility restrictions3

(0.5)

(0.2)

Solvency II Own Funds4,5

16.6

17.1

Solvency Capital Requirement

(9.1)

(9.7)

Solvency II surplus

7.5

7.4

-

SCR Coverage ratio6

183%

177%

1. Restricted Tier 1 Own Funds represent Perpetual restricted Tier 1 contingent convertible notes.

2. Tier 2 subordinated liabilities include £0.3bn of subordinated debt issued during 2009, callable in 2021. On 26 May 2021, notification was given that the group intends to redeem these notes in full on 23 July 2021. Effective from the notification date, the notes were no longer treated as Tier 2 own funds for Solvency II purposes.

3. Eligibility restrictions include £0.3bn of subordinated debt, following the notification to redeem the notes in full.

4. Solvency II Own Funds do not include an accrual for the interim dividend of £309m (31 December 2020: £754m) declared after the balance sheet date.

5. Solvency II Own Funds allow for a Risk Margin of £5.5bn (2020: £6.1bn) and TMTP of £4.8bn (2020: £5.6bn).

6. SCR Coverage ratio is based on unrounded inputs.

The table below shows the movement (net of tax) during the six month period ended 30 June 2021 in the group's Solvency II surplus.

6 months

Full year

30 Jun 2021

31 Dec 2020

£bn

£bn

Surplus arising from back-book (including release of SCR)

0.7

1.3

Release of Risk Margin1

0.3

0.6

Amortisation of TMTP2

(0.2)

(0.4)

Total operational surplus generation3

0.8

1.5

New business strain

(0.2)

(0.3)

Net surplus generation

0.6

1.2

Operating variances4

-

0.4

Mergers, acquisitions and disposals5

-

(0.1)

Market movements6

0.6

(1.4)

Restricted Tier 1 convertible notes7

-

0.5

Subordinated liabilities8

(0.3)

0.5

Dividends paid9

(0.8)

(1.0)

Total surplus movement (after dividends paid in the period)

0.1

0.1

1. Based on the Risk Margin in force at 31 December 2020 and does not include the release of any Risk Margin added by new business written in 2021.

2. TMTP amortisation based on a linear run down of the 31 December 2020 TMTP.

3. Release of surplus generated by in-force business and includes management actions which at the start of the year could have been reasonably expected to take place. For 2021 these are primarily related to the planned reinsurance of back-book liabilities.

4. Operating variances include the impact of experience variances, changes to valuation and capital calibration assumptions, other management actions including changes in asset mix, hedging strategies, and Matching Adjustment optimisation.

5. 2020 primarily reflected the impacts of the sale of the Mature Savings business, which completed in H2 2020.

6. Market movements represent the impact of changes in investment market conditions over the year and changes to future economic assumptions. Market movements in 2021 include a decrease in the Risk Margin of £0.5bn net of tax (2020: increase of £0.7bn) and a decrease to TMTP of £0.5bn net of tax (2020: increase of £0.7bn).

7. Restricted Tier 1 Own Funds represent Perpetual restricted Tier 1 contingent convertible notes, issued in 2020. No additional issuance in 2021.

8. Subordinated liabilities reflect the restriction applied to the £0.3bn debt issued in 2009, which is no longer available as capital following the group's announcement in May 2021 to redeem these notes in full on 23 July 2021 (2020: Issuance of £0.5bn).

9. Dividends paid are the amounts from the 2020 final dividend paid in H1 2021 (2020: 2019 final dividend and 2020 interim dividend).

(d) Reconciliation of IFRS Net Release from Operations to Solvency II Net Surplus Generation

(i) The table below provides a reconciliation of the group's IFRS Release from operations to Solvency II Operational surplus generation.

6 months

Full year

2021

2020

£bn

£bn

IFRS Release from operations

0.8

1.3

Expected release of IFRS prudential margins

(0.2)

(0.5)

Releases of IFRS specific reserves1

(0.1)

(0.2)

Solvency II investment margin2,3

-

0.3

Release of Solvency II Capital Requirement and Risk Margin less TMTP amortisation

0.3

0.6

Solvency II Operational surplus generation4

0.8

1.5

1. Release of prudence from IFRS specific reserves which are not included in Solvency II (e.g. long term longevity and expense margins).

2. Release of prudence related to differences between the PRA defined Fundamental Spread and Legal & General's best estimate default assumption.

3. Expected market returns earned on LGR's free assets in excess of risk-free rates over 2021.

4. Solvency II Operational Surplus Generation includes management actions which at the start of 2021 were reasonably expected to be implemented over the year.

(ii) The table below provides a reconciliation of the group's IFRS New business surplus to Solvency II New business strain.

6 months

Full year

2021

2020

£bn

£bn

IFRS New business surplus

0.1

0.3

Removal of requirement to set up prudential margins above best estimate on new business

0.2

0.3

Set up of SCR on new business

(0.4)

(0.7)

Set up of Risk Margin on new business

(0.1)

(0.2)

Solvency II New business strain1

(0.2)

(0.3)

1. UK PRT new business volume during 2021 was £3.0bn, compared to £7.6bn over 2020.

A reconciliation of the group's IFRS equity to Solvency II Own Funds is given below:

30 Jun 2021

31 Dec 2020

£bn

£bn

IFRS equity1

10.3

10.0

Remove DAC, goodwill and other intangible assets and associated liabilities

(0.4)

(0.4)

Add IFRS carrying value of subordinated borrowings2

4.0

4.0

Insurance contract valuation differences3

4.0

4.5

Difference in value of net deferred tax liabilities

(0.7)

(0.6)

SCR for final salary pension schemes

(0.1)

(0.2)

Eligibility restrictions4

(0.5)

(0.2)

Solvency II Own Funds5

16.6

17.1

1. IFRS equity represents equity attributable to owners of the parent and restricted Tier 1 convertible debt note as per the Consolidated Balance Sheet.

2. Treated as available capital on the Solvency II balance sheet as the liabilities are subordinate to policyholder claims.

3. Differences in the measurement of technical provisions between IFRS and Solvency II.

4. Eligibility restrictions include the impact of redemption of £0.3bn of subordinated debt as announced by the group on 26 May 2021, in addition to the Own Funds of non-insurance regulated entities that are subject to local regulatory rules.

5. Solvency II Own Funds do not include an accrual for the interim dividend of £309m (31 December 2020: £754m) declared after the balance sheet date.

(f) Sensitivity analysis

The following sensitivities are provided to give an indication of how the group's Solvency II surplus as at 30 June 2021 would have changed in a variety of adverse events. These are all independent stresses to a single risk. In practice, the balance sheet is impacted by combinations of stresses and the combined impact can be larger than adding together the impacts of the same stresses in isolation. It is expected that, particularly for market risks, adverse stresses will happen together.

Impact on

Impact on

Impact on

Impact on

net of tax

net of tax

net of tax

net of tax

Solvency II

Solvency II

Solvency II

Solvency II

capital

coverage

capital

coverage

surplus

ratio

surplus1

ratio1

2021

2021

2020

2020

£bn

%

£bn

%

Credit spreads widen by 100bps assuming an escalating addition to ratings1,2

0.5

11

0.5

11

Credit spreads narrow by 100bps assuming an escalating addition to ratings1,2

(0.7)

(12)

(0.7)

(12)

Credit spreads widen by 100bps assuming a level addition to ratings1

0.6

12

0.7

13

Credit spreads of sub investment grade assets widen by 100bps assuming a level addition to ratings1,3

(0.3)

(5)

(0.4)

(5)

Credit migration4

(0.8)

(9)

(1.2)

(13)

25% fall in equity markets5

(0.5)

(4)

(0.5)

(4)

15% fall in property markets6

(0.8)

(7)

(0.6)

(6)

50bps increase in risk-free rates7

0.5

11

0.6

11

100bps increase in risk-free rates7

1.0

21

1.0

20

50bps decrease in risk-free rates7,8

(0.7)

(12)

(0.7)

(11)

50bps increase in future inflation expectations7

(0.1)

(3)

-

(2)

Substantially reduced Risk Margin9

0.6

6

0.5

5

1. The spread sensitivity applies to the group's corporate bond (and similar) holdings, with no change in long-term default expectations. Restructured lifetime mortgages are excluded as the underlying exposure is mostly to property.

2. The stress for AA bonds is twice that for AAA bonds, for A bonds it is three times, for BBB four times and so on, such that the weighted average spread stress for the portfolio is 100 basis points. To give a 100bps increase on the total portfolio, the spread stress increases in steps of 32bps, i.e. 32bps for AAA, 64bps for AA etc.

3. No stress for bonds rated BBB and above. For bonds rated BB and below the stress is 100bps. The spread widening on the total portfolio is 2bps as the group holds less than 2% in bonds rated BB and below. The impact is primarily an increase in SCR arising from the modelled cost of trading downgraded bonds back to a higher rating in the stress scenarios in the SCR calculation.

4. Credit migration stress covers the cost of an immediate big letter downgrade on 20% of all assets where the capital treatment depends on a credit rating (including corporate bonds, and sale and leaseback rental strips; lifetime mortgage senior notes are excluded). Downgraded assets are assumed to be traded to their original credit rating, so the impact is primarily a reduction in Own Funds from the loss of value on downgrade. The impact of the sensitivity will depend upon the market levels of spreads at the balance sheet date.

5. This relates primarily to equity exposure in LGC but will also include equity-based mutual funds and other investments that receive an equity stress (for example, certain investments in subsidiaries). Some assets have factors that increase or decrease the stress relative to general equity levels via a beta factor.

6. Assets stressed include residual values from sale and leaseback, the full amount of lifetime mortgages and direct investments treated as property.

7. Assuming a recalculation of the Transitional Measure on Technical Provisions that partially offsets the impact on Risk Margin.

8. In the interest rate down stress negative rates are allowed, i.e. there is no floor at zero rates.

9. Assuming a 2/3 reduction in the Risk Margin, allowing for offset from an equivalent reduction in the Transitional Measure on Technical Provisions.

The above sensitivity analysis does not reflect all management actions which could be taken to reduce the impacts. In practice, the group actively manages its asset and liability positions to respond to market movements. Other than in the interest rate and inflation stresses, we have not allowed for the recalculation of TMTP.

The impacts of these stresses are not linear therefore these results should not be used to interpolate or extrapolate the impact of a smaller or larger stress. The results of these tests are indicative of the market conditions prevailing at the balance sheet date. The results would be different if performed at an alternative reporting date.

(a) New business by product1

Management estimates of the present value of new business premium (PVNBP) and the margin for selected lines of business are provided below:

Contribution

Contribution

from new

from new

PVNBP2

business3

Margin4

PVNBP2

business3

Margin4

6 months

6 months

6 months

Full year

Full year

Full year

2021

2021

2021

2020

2020

2020

£m

£m

%

£m

£m

%

LGR - UK annuity business

3,269

274

8.4

8,503

901

10.6

UK Protection Total

1,089

83

7.6

1,887

160

8.5

- Retail Protection

828

65

7.8

1,359

123

9.1

- Group Protection

261

18

7.1

528

37

7.0

US Protection5

413

48

11.5

829

94

11.2

1. Selected lines of business only.

2. PVNBP excludes quota share reinsurance single premium of £0.2bn relating to LGR new business, where the treaty was finalised after the balance sheet date.

3. The contribution from new business is defined as the present value at the point of sale of expected future Solvency II surplus emerging from new business written in the year using the risk discount rate applicable at the end of the year.

4. Margin is based on unrounded inputs.

5. In local currency, US Protection reflects PVNBP of $574m (31 December 2020: $1,064m) and a contribution from new business of $66m (31 December 2020: $120m).

The decrease in LGR margin was driven by the shorter average duration for the schemes written in the first six months of the year, compared to the schemes written in prior year.

For UK Protection the contribution from new business is supported by strong volumes in Retail Protection where the reduction in margin is largely due to pricing action, movements in product mix and changes in market conditions in H1 2021.

The US Protection margin improved compared to the prior full year. The increase is driven by business mix and modified reinsurance terms on digital products.

30 Jun 2021

31 Dec 2020

%

%

Margin for Risk

3.6

3.9

Risk-free rate

- UK

1.1

0.5

- US

1.5

0.9

Risk discount rate (net of tax)

- UK

4.7

4.4

- US

5.1

4.8

Long-term rate of return on non-profit annuities in LGR

2.4

2.1

A reconciliation of PVNBP and gross written premium is given below:

6 months

Full year

2021

2020

Notes

£bn

£bn

PVNBP

6.02 (a)

4.8

11.2

Effect of capitalisation factor

(1.3)

(2.3)

New business premiums from selected lines

3.5

8.9

Other1

0.7

2.0

Total LGR and LGI new business

5.05,5.06

4.2

10.9

Annualisation impact of regular premium long-term business

(0.2)

(0.2)

IFRS gross written premiums from existing long-term insurance business

1.6

3.0

Deposit accounting for investment products

(1.3)

(1.2)

Total gross written premiums2

4.3

12.5

1. Other principally includes annuity sales in the US, lifetime and retirement interest only mortgage advances and the reversal of a quota share reinsurance single premium of £0.2bn relating to LGR new business, where the treaty was finalised after the balance sheet date.

2. Total gross written premiums include £55m of gross written premiums relating to a residual reinsurance treaty following the disposal of the General Insurance business.

Market

Market

Market

value

value

value

30 Jun

30 Jun

31 Dec

2021

2020

2020

£m

£m

£m

Worldwide total assets under management1,2

1,333,203

1,247,960

1,285,489

Client and policyholder assets

(1,218,560)

(1,119,803)

(1,161,631)

Non-unit linked with-profits assets

-

(9,854)

-

Investments to which shareholders are directly exposed

114,643

118,303

123,858

1. Worldwide total assets under management include LGIM AUM and other group assets not managed by LGIM.

2. As part of a change in accounting policy in 2020 for LGIA universal life and annuity reserves, certain financial investments were reclassified from designated as amortised cost to designated as fair value through profit or loss. Accordingly, the 30 June 2020 balance for Worldwide total assets under management has been restated to reflect the fair value of those assets. Further details on the impact of the 2020 change in accounting policy are provided in Note 4.01.

Analysed by investment class:

Other

non-profit

Other

LGR

insurance

LGC

shareholder

investments

investments

investments

investments

Total

Total

Total

30 Jun

30 Jun

30 Jun

30 Jun

30 Jun

30 Jun

31 Dec

2021

2021

2021

2021

2021

2020

2020

Notes

£m

£m

£m

£m

£m

£m

£m

Equities

11

31

2,739

307

3,088

2,812

3,086

Bonds3

7.03

78,226

2,366

1,827

280

82,699

81,337

85,502

Derivative assets4

13,987

-

32

-

14,019

22,388

20,936

Property

7.04

4,639

-

464

-

5,103

4,250

4,672

Loans3,5

3,472

29

789

11

4,301

2,000

4,248

Financial investments

4.04 (a)

100,335

2,426

5,851

598

109,210

112,787

118,444

Cash and cash equivalents

1,866

242

1,222

410

3,740

3,777

3,616

Other assets6

100

-

1,593

-

1,693

1,739

1,798

Total investments

102,301

2,668

8,666

1,008

114,643

118,303

123,858

3. As part of a change in accounting policy in the second half of 2020 for LGIA universal life and annuity reserves, certain financial investments were reclassified from designated as amortised cost to designated as fair value through profit or loss. Accordingly, the 30 June 2020 balances for Bonds and Loans have been restated to reflect the fair value of those assets. Further details on the impact of the 2020 change in accounting policy are provided in Note 4.01.

4. Derivative assets are shown gross of derivative liabilities of £17.7bn (30 June 2020: £24.9bn; 31 December 2020: £21.2bn). Exposures arise from use of derivatives for efficient portfolio management, especially the use of interest rate swaps, inflation swaps, credit default swaps and foreign exchange forward contracts for assets and liability management.

5. Loans include reverse repurchase agreements of £4,152m (30 June 2020: £1,868m; 31 December 2020: £4,117m).

6. Other assets include finance leases of £87m (30 June 2020: £89m; 31 December 2020: £88m), associates and joint ventures of £314m (30 June 2020: £328m; 31 December 2020: £288m) and the consolidated net asset value of the group's investments in CALA Homes and other housing businesses.

(a) Analysed by asset class

Direct1

Traded2

Direct1

Traded2

Direct1

Traded2

investments

securities

Total

investments

securities

Total

investments

securities

Total

30 Jun

30 Jun

30 Jun

30 Jun

30 Jun

30 Jun

31 Dec

31 Dec

31 Dec

2021

2021

2021

2020

2020

2020

2020

2020

2020

£m

£m

£m

£m

£m

£m

£m

£m

£m

Equities

1,202

1,886

3,088

1,142