LEGAL & General hailed “excellent” results – and said it stood to benefit from the Government’s austerity measures as more people save money to safeguard their future.
Operating profits from savings products rose by one-and-a-half times to £115m on increased demand for private pensions and as customers invested money to escape paltry bank interest rates.
But Legal’s UK general insurance business made a loss of £8m after December’s snow caused a spike in household claims.
Group pre-tax profits rose by 2% to £1.1bn in 2010 on sales 28% higher at £1.8bn.
The group announced a 25% increase in the final dividend payment to shareholders – as chief executive Tim Breedon said he was confident about the growth prospects.
He said Legal would be “a growing force as the welfare state retrenches and individuals increasingly look to high-quality, good value risk, savings and investment provision”.
The group also expects to benefit from an ageing UK population, which should increase demand for its products.
Mr Breedon said: “Our balance sheet is strong, each of our business divisions is profitable and cash-generative and we are delivering excellent results across the group.”
Legal benefited from a “transformation” in its savings business as confidence returned to equity markets and the amounts that can be invested in tax-free ISA accounts rose to £10,200.
But its risk business saw a 24% reduction in operating profits to £560m after the general insurance business made a loss.
Investment management arm LGIM also saw strong growth in 2010 as the stock market rebounded and its managed funds increased in popularity.
Funds under management grew by 12% to £354bn and profits rose to a record £206m – up 20% on the previous year.
Shares closed down 0.4p at 110.7p.