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Legal & General Group PLC said profit growth in 2024 will be in line with the guidance it provided back in June, as the insurer on Wednesday holds a ‘deep dive’ for investors about its Institutional Retirement business.
L&G shares were up 3.7% to 231.10 pence on Wednesday morning in London. The wider FTSE 100 index, by contrast, was 0.3% lower.
The London-based life insurer expects mid-single digit growth in operating profit for 2024, in line with guidance. Thereafter, it expects to achieve its 6% to 9% compound annual growth target in core operating earnings per share between 2024 and 2027.
The ‘deep dive’ into L&G’s Institutional Retirement division is the first in a series of events which will cover all three of its businesses. The other two are Retail Savings & Protection and Asset Management.
‘The global pension risk transfer market is growing and attractive and the group is well-positioned to continue to seize the opportunity,’ L&G said.
Its pipeline of PRT deals is ‘as strong as it has ever been’. Guidance of £50 billion to £65 billion of UK pension risk transfers between 2024 and 2028 is unchanged.
In the Institutional Retirement division, L&G expects compound annual operating profit growth between 5% and 7% between 2023 and 2028.
L&G added: ‘Year-to-date we have written global PRT volumes of £10.0 billion and are exclusive on a further £500 million expected to close in 2024. Of this £10.5 billion, £8.4 billion is UK and £2.1 billion is International, with L&G writing its highest ever volumes in the US and Canada.
Strain has also been lower than expected, it said, at 1% compared to initial guidance of below 4%.
According to LexisNexis, strain refers to the loss incurred by a life insurance company in the first year of a policy, representing the excess of acquisition expenses over the income received in that first year.
‘We anticipate returning to shareholders a proportion of the capital not deployed on strain this year. This will form part of the board’s wider consideration of buyback capacity, which will be set out at the FY24 results in March 2025 and would be incremental to the capital return intentions indicated at the capital markets event in June,’ L&G added.
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