Legal & General (LGEN.L) of Britain will return approximately $6.5 billion to investors through buybacks and dividends over three years as it seeks to reinforce their trust in its restructuring.
Since António Simões took over as CEO in 2023, the life insurer and asset manager has divested from non-core operations, selling its U.S. protection business for $2.3 billion and its UK housebuilder CALA Group for £1.35 billion.
L&G’s shares, having risen over 6% this year, dropped by approximately 2%. According to analysts at RBC Capital Markets, the pre-tax profit under IFRS accounting was “materially below” their estimate, and the contractual service margin was 3% weaker than expected.
During a conference call, Simões dismissed the price drop on Wednesday.
It concerns the long term. The vision we laid out in June is for L&G to grow, simplify, improve connections, and enhance its capital base over time. He said, “These things require time.”
„Meine Aufgabe besteht darin, Tag für Tag weiterhin zu liefern und vom Markt dafür anerkannt zu werden.“
The company anticipated ongoing growth in retail annuities, a view that was shared by Matt Britzman, senior equity analyst at Hargreaves Lansdown.
He noted that L&G is in a good position to take advantage of the renewed interest from individuals and institutions alike in reducing the risk associated with their pensions, especially given the significant long-term capital contributions from the bulk annuity market.
Companies can use bulk annuities to insure their corporate pension schemes and transfer risk from their balance sheets.
A report from January indicated that British pension insurance deals amounted to £45 billion in 2024, with an expectation of £40–50 billion for this year.
L&G announced a core operating profit of £1.62 billion for the year ending December 2024, an increase from £1.53 billion the previous year and consistent with expectations.
It announced plans to repurchase shares worth 500 million pounds this year, which is approximately 50 million above the consensus expectations from Jefferies.
($1 equates to 0.7745 pounds)
