2018 results: Record £10bn annuity sales, AUM exceeds £1tn, operating profit up 10% to £1.9bn
6 Mar 2019
- OPERATING PROFIT1 OF £1,902M, up 10% (2017: £1,723m)
- EARNINGS PER SHARE3 OF 24.74P, up 7% (2017: 23.10p) - impacted by reductions in asset markets
- RETURN ON EQUITY AT 22.7% (2017: 25.6%)
- FULL YEAR DIVIDEND UP 7% TO 16.42P PER SHARE (2017: 15.35P)
- PROFIT AFTER TAX4 DOWN 3% TO £1,827M (2017: £1,891M) - prior year one-off US tax benefit of £246m
- SOLVENCY II COVERAGE RATIO5 OF 188% (2017: 189%)
- SOLVENCY II OPERATIONAL SURPLUS GENERATION UP BY 14% TO £1.4BN (2017: £1.3BN)
Investing & Annuities
- LGR PENSION RISK TRANSFER SALES6 OF £9.1BN (2017: £3.9BN)
- LGR INDIVIDUAL ANNUITY SALES UP 18% TO £795M (2017: £671M)
- LGR LIFETIME MORTGAGE ADVANCES UP 19% TO £1.2BN (2017: £1.0BN)
- GROUP-WIDE DIRECT INVESTMENT UP 34% AT £19.2BN (2017: £14.4BN)
- LGIM AUM UP 3% AT £1,015BN (2017: £983BN)
- LGIM EXTERNAL NET FLOWS OF £42.6BN (2017: £43.5BN)
- LGI TOTAL GWP UP 3% TO £2,615M7 (2017: £2,531M8), INCLUDING US GWP OF $1,299M (2017: $1,254M)
- GENERAL INSURANCE GWP UP 11% TO £410M (2017: £369M)
2018 saw political uncertainty, asset market declines and slowing economic growth, but we are resilient and performed strongly. We became the UK’s first £1 trillion investment manager, executed a record £9 billion of pension risk transfer deals and invested billions in the UK’s future infrastructure and cities.
Nigel Wilson, Group Chief Executive
1 Excludes mortality release of £433m (2017: £332m) from LGR’s £44.5bn net longevity exposure. 2018 mortality release relates to changes in longevity improvement assumptions to align to CMI 2016 tables. Including the reserve release, operating profit was up 14% to £2,335m (2017: £2,055m).
2 The Alternative Performance Measures within the Group’s financial highlights are defined in the glossary, on pages 91 to 96 of this report.
3 Excludes post-tax mortality release of £359m (2017: £274m), and a 2017 one-off US tax benefit of £246m. Including these impacts, EPS was down 3% at 30.79p (2017: 31.87p).
4 Profit after tax attributable to equity holders. Profit after tax attributable to equity holders was up 7% at £1,468m (2017: £1,371m) excluding mortality releases and the 2017 one-off US tax benefit.
5 Solvency II coverage ratio on a shareholder basis is adjusted for the Own Funds and SCR of the With-profits fund and the Group final salary pension schemes.
6 Excludes Longevity Insurance transactions (2018: £287m, 2017: £800m).
7 Constant FX rate comparisons have been calculated by applying the average FX rates for 2017 to both 2017 and 2018 local currency results. Based on actual FX rate, up 2% to £2,580m. Actual FX rate comparisons apply the 2017 and 2018 average FX rates to the equivalent periods’ results respectively.
8 Excludes Legal & General Netherlands which was sold on 6 April 2017.