OUR STRATEGY - SIX LONG TERM GROWTH DRIVERS

A colourful building

Our strategy inspires us to help people achieve financial security and makes us economically and socially useful to society. It's underpinned by long-term growth drivers that continue to hold true, despite any short-term economic and political turmoil.

Global Demographics

A man in a red coat

What is our strategic aim?

Achieve market leadership in global pensions de-risking and provide a suite of products to maximise retirement income.

What is the rationale for this growth driver?

DB pensions are in crisis with an estimated £560 billion of private sector pension scheme deficits exacerbated by low interest rates; and the ageing population, illustrated by the projected doubling of over 75s in the UK between 2015 and 2050.

What we do

We offer investment solutions at every stage of a scheme's life cycle. From the growth phase, through de-risking with liability driven investments (LDI) and bulk annuities, right to the setting up of new defined contribution (DC) schemes. Additionally we write lifetime mortgages enabling the over 60s to access some of the equity in their property to help fund their retirement.

Recent Achievements

  • LGR record annuity transactions of £7.0 billion
  • £620 million lifetime mortgage sales
  • 45% share of LDI solutions market, UK market leader
  • Auto-enrolment boosts DC customers to 2.2m
  • Acquisition of £2.9bn UK Aegon annuity portfolio
  • £750m ICI pension buy-in - post Brexit

Businesses key to our response

Legal & General Retirement

Legal & General Investment Management

Legal & General Capital

Globalisation of asset markets

Buildings

What is our strategic aim?

Diversify by increasing assets and earnings internationally.

What is the rationale for this growth driver?

Global wealth assets exceed $70 trillion. We're successful in the UK and the US, but we've just around a 1.5% share globally. There is a lot of room to grow whilst we're exporting our skills internationally.

What we do

We're expanding our international businesses in the US, Europe, the Gulf and Asia, using our asset management and risk management skills.

Recent Achievements

  • International AUM of £177bn, up 45%
  • $146.5bn AUM in the US
  • Four of top five US DB pension fund clients
  • Won US DC mandates
  • Second distribution agreement in Japan
  • Build-to-rent partnership with Dutch investors

Businesses key to our response

Legal & General Retirement

Legal & General Investment Management

Legal & General Capital

Legal & General Insurance

Creating new real productive assets

A girl playing in her home

What is our strategic aim?

Improve returns and change people's lives by creating real assets.

What is the rationale for this growth driver?

We seek to invest the group's £54.4 billion pension annuity assets in higher performing risk-adjusted classes. Direct investments can offer better and more predictable returns to shareholders and can create economic benefits.

What we do

Because we need to invest annuity assets, for example, for 20, 30 or 40 years to match pension liabilities, we invest our principal balance sheet in housing, infrastructure and SME finance to create new matching assets. These assets match the duration of our liabilities better than corporate bonds, gilts or cash can.

Recent Achievements

  • £10 billion of £15 billion direct investments commitment reached
  • Entered £600 million build-to-rent joint-venture schemes in Walthamstow, Salford and Bristol
  • Invested as part of major schemes in London Gateway Port (£400m), Salford (£246m) and Newcastle (£350m)

Businesses key to our response

Legal & General Retirement

Legal & General Investment Management

Legal & General Capital

Reform of the Welfare State

Two women using laptops

What is our strategic aim?

Drive earnings growth through a market leading insurance business and a successful auto-enrolled pensions business.

What is the rationale for this growth driver?

Many families will struggle to survive financially following death, disability or sickness. Company and individual insurance cover can safeguard financial independence. Auto-enrolled pensions enable people to live independently with their own pension savings.

What we do

We aim to work closely with government to provide better financial safeguards for consumers. We provide life insurance cover for death, critical illness and long-term sickness and disability for individuals and companies. We provide fully-bundled auto-enrolled pension solutions for employers.

Recent Achievements

  • 26% share of individual life protection UK market
  • Retail protection direct sales up 7%, GI direct sales up 20%
  • Mortgage Club sold 1 in 5 UK mortgages
  • Top 10 player in US term life market with 1.2 million customers
  • DC provides for Tesco with over 200,000 employees.
  • 2.2 million customers in over 9,000 DC schemes.

Businesses key to our response

Legal & General Insurance

Legal & General Investment Management

Technological innovation

A man with a virtual reality headset on

What is our strategic aim?

Build a truly digital business to drive efficiency and engage with customers.

What is the rationale for this growth driver?

Consumers often choose companies that can offer low prices and digital access. We believe that the market will favour businesses that build low-cost, efficient digital operating models.

What we do

Our digital strategy for customers allows insurance customers to obtain quotes, apply for policies and review and renew them using mobile and digital technology. We are increasing efficiency in our admin operations through building low cost digital processes. We are also building up a direct retail investment business to help customers use digital applictions to build up savings and manage investments.

Recent Achievements

  • Sales of lifetime mortgages through our digital platform reached £620 million
  • Investment/partnership with Fintech auto-enrolled pension provider
  • My Account: nearly 900K users with c450K new customers signed up in 2016
  • Low cost model, with average of 80% life insurance straight-through processing

Businesses key to our response

Legal & General Retirement

Legal & General Investment Management

Legal & General Capital

Legal & General Insurance

Legal & General Savings

General Insurance

Providing today's capital

Buildings

What is our strategic aim?

Build economic growth and earnings by investing in Britain's future.

What is the rationale for this growth driver?

Investment capital has been in short supply in recent years. Yet the UK economy needs jobs, long-term infrastructure, better housing and investment capital to fund businesses.

What we do

We invest the group's regulatory balance sheet to create new jobs, businesses and homes. We partner with alternative asset management groups, lend funds to mid-sized UK businesses and work with property developers to drive urban regeneration.

Recent Achievements

  • Achieved €1.2 billion commitments through partnership in Pemberton SME fund
  • Modular homes business launched
  • SME equity finance, £150 million venture with Woodford Investment Management
  • Infrastructure projects: Bracknell, Newcastle
  • Partnership with NTR, financing 10 onshore wind farms

Businesses key to our response

Legal & General Retirement

Legal & General Investment Management

Legal & General Capital