International earnings boost profits for Legal & General, signifying significant growth in their global operations
Legal & General Posts Strong First-Half Results, Outlines US Expansion Plans
British insurance and investment management company, Legal & General, has reported a six percent increase in core operating profit for the first half of 2025, marking a robust start to the year. The company's IFRS profit before tax rose to £406m, an impressive 28 percent increase.
Despite the strong set of results, the share price dropped 3.29 percent to 252p in early morning trading. However, the company remains optimistic about its growth prospects, particularly in the US.
Legal & General's growth plans for 2025 focus on strategic portfolio adjustments and partnerships to enhance returns and market positioning. One of the key moves is the sale of their US protection business to Japanese insurance company Meiji Yasuda for £1.72bn. This transaction is part of a broader partnership aimed at enhancing returns and sharpening strategic focus.
The company has also made significant strides in the pension risk transfer (PRT) business. They wrote £3.4bn in global PRT deals, with over £116m in US PRT deals in H1 2025. Additionally, they have agreed to over £350m in transactions since June 30, signaling robust activity despite a decline in very large deals.
Legal & General is also strengthening its global real estate platform and competitiveness in annuities and asset management through strategic repositioning. This includes investments such as the stake in Proprium Capital Partners and partnerships like the one with Blackstone.
The company expects growth in buy-in PRT transactions in the US, which are becoming more popular and are expected to increase by over 50% this year compared to previous years.
In the UK, Legal & General expects £40bn to £50bn of risk transfer deals this year. The company's expansion in Workplace Defined Contribution (DC) led to assets under administration (AUA) surpassing £100bn.
The company remains on track to return over £5bn to shareholders within three years. Ninety percent of the £500m buyback announced in the 2024 full year results is now complete.
Operating profit fell from £214m to £202m due to market volatility and a weaker USD. However, the company's Solvency II capital generation increased to £729m. Revenues grew by two percent due to efforts to shift towards higher-margin products. Retail operating profit increased by three percent.
The Solvency coverage ratio fell from 232 percent to 217 percent. Net flows increased 21 percent to £400bn in Workplace Defined Contribution (DC).
CEO Antonio Simoes stated, "The outlook for the business is positive and we are firmly on track to achieve our financial targets."
In summary, Legal & General is expanding in the US through divesting non-core businesses, building strong partnerships, enhancing pension risk transfer offerings, and growing real estate and asset management platforms, all contributing to a positive outlook to achieve their financial targets in 2025.
- Legal & General plans to boost its presence in the US by selling their US protection business to Meiji Yasuda and forming partnerships to enhance returns and market positioning.
- Despite a drop in the share price, Legal & General remains optimistic about its growth prospects in the US and expects an increase in buy-in pension risk transfer transactions and growth in assets under administration (AUA) in Workplace Defined Contribution (DC).
- The company's expansion strategies in the US, which include strategic portfolio adjustments and partnerships, align with its broader aim to return over £5bn to shareholders within three years.
