Legal & General has seen an 11% increase in UK protection sales in the first half of 2024, driven by its group risk business, compared to the same period last year.
However, the figures are largely unchanged from the previous six months to end 2023 and the overall group post-tax profit dropped 41% including a £110m write-down in Salary Finance.
According to its half year 2024 results, Legal & General UK protection new business reached £143m – up from £129m in the first six months of 2023.
The uplift was entirely driven by a £15m (22%) increase in group protection premiums to £68m, which has been maintained from the second half of 2023.
Overall, including its US protection arm which saw a 17% rise to £81m, the results show protection new business climbed to £224m in the first half of 2024 from £199m in H1 2023. The figures were also up from the £213m in the second six months of 2023 due to the US growth.
L&G said its online quote and apply platform for smaller schemes had continued to perform well, processing around 492 new clients over the year up from 261 in the first half of last year. And the insurer added it continued to see growth in this part of the market.
Group protection saw 1,359 income protection scheme members return to work during the first half of the year, L&G said.
UK retail protection gross premiums rose to £760m from £752m over the same period in what the insurer described as remaining a “highly competitive” market, with new business annual premiums of £75m – marginally down from £76m in H1 2023.
UK group protection gross premium income increased 18% to £349m from £295m in H1 2023, which the group said came as a consequence of good retention and new business annual premiums of £68m, up from £53m in H1 2023.
US protection up
Meanwhile, the group reported its US protection (LGIA) new business increased 18% to $103m from $87m in H1 2023 with “robust” Solvency II new business margins of 12.1% from 11.2% in H1 2023. Gross premiums also increased 6% to $831m from $781m in H1 2023.
L&G said its digital new business platform was making it easier for customers and their advisers to apply and buy term products, resulting in its strongest ever six month sales volumes in H1 2024 which was driving up its market share.
The group said it expects to drive further sales growth and to reduce unit costs over the coming years, adding around 98% of eligible new business is now submitted through the digital new business platform.
Profit down 41%
Across the group’s post-tax profit sank 41% to £223m from £377m in H1 2023, although its core operating profit was maringally up to £849m from £844m.
The hit to its profit included a £110m write-down in the value of Salary Finance which it originally invested in during 2017 with a further round in 2020.
Amid rumours of a sale, L&G said it was considering “options to manage the business outcome in the best interests of customers and shareholders”.
L&G also took a significant hit to the cost of its annuity portfolio due to the increase in interest rates of 64bps and movements in inflation expectations.
Legal & General CEO António Simões said: “These results reflect the ongoing strength of our business, with core operating profit slightly ahead of the prior year and a solvency coverage ratio of 223%. We continue to expect 2024 core operating profit to grow by mid-single digits year-on-year.
“At our Capital Markets event in June we set out our strategy to deliver L&G’s next phase of sustainable growth and enhanced returns, through focused capital allocation and rigour in execution.
“We are pleased to announce a 5% increase in interim dividends per share, and progress in undertaking a £200m share buyback, consistent with our new capital return framework.”