One of the giants of the UK insurance sector has set its sights on further growth over the next five years as it looks to capitalise on some key demographic trends.
As part of an investor day in London, Legal & General outlined its ambitions to maintain its current rate of progress, which has seen its profits surge by an average of 8% over each of the last five years – a pace that would be ahead of many of its leading rivals, including
Allianz,
AXA and
Aviva which have outlined targets for growth in the region of 5% over the medium term.
In particular, Nigel Wilson, the chief executive of Legal & General, pointed to an ageing population as a key potential growth driver.
“Through a combination of good analytical insights and some good luck, we have chosen to build our businesses around long-term structural growth drivers - both macroeconomic and demographic,” he said, as quoted by
The Financial Times. “The world’s population is simply getting older… there is more need for real assets… producing real returns.”
The target could be seen as ambitious particularly given the turmoil in the climate currently on the back of the Brexit vote. The company is highly focused on the UK market – a move that was further emphasised by its
decision to sell Chesnara, its Dutch operation, last month.
However, despite an initial fall in share value on the back of the EU referendum, the company has recovered its losses and is said to be on track for cash generation that is around 6% ahead of estimates and in the region of £1.4 billion.
In addition, the company is said to be looking at long term investments with Wilson commenting that “we need more ideas from my colleagues on where we should deploy that capital”.
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