Legal & General has today revealed its full year 2020 financial report, which indicated its operating profit dipped 3% to £2.22 billion from £2.29 billion in 2019, though the insurer noted that three out of five of its businesses are delivering growth. Profit after tax, meanwhile, is down 12% to £1.607 billion from 2019’s £1.834 billion, which the business noted reflects the formulaic impact of lower interest rates on LGI and the unrealised impact of market movements.
For LGI, its new business annual premiums are up 10% to £372 million, supporting £2.849 billion in gross written premiums
Among other key results, Legal & General noted that, despite COVID, it delivered financial metrics in line with its five year ambitions (2020-2024), including a net release from operations of £1.539 billion, a full year dividend of 17.57p per share, unchanged from last year, and a Solvency II operational surplus generation from continuing operations of £1.5 billion, unchanged from last year. The insurer delivered a return on equity of 17.3%, down from last year’s 20.4%.
Commenting on the results, Nigel Wilson, group CEO said the business delivered a “robust and resilient” performance for all stakeholders, providing stability to our people, customers and shareholders.
“Our balance sheet remains strong,” he said, “with the Solvency II coverage ratio currently over 190%, and trading remains consistent with delivering our growth ambitions which are supported by six long term growth drivers. Our commitment to inclusive capitalism, ESG and investing in climate change means we intend to play an important role in the post pandemic recovery.”
Discussing the results with Reuters, which revealed that Legal & General’s shares were down 0.3% at 08:49am GMT, Wilson noted that the world is likely to come out of the COVID crisis in an un-even K-shaped recovery that might leave some parts of the economy behind.
“The thing that worries us is the K-shaped recovery,” he told Reuters. “We do need to make sure that levelling up does not mean levelling up for the few.”
