Legal & General has reported strong results for 2022, seeing operating profit rise 12% to £2.5bn, with an estimated Solvency II coverage ratio of 236%.
Earning per share (EPS) also increased 12% from the previous year to 38.33p, while return on equity stood at 20.7%.
L&G estimates that as of March 3rd, 2023, the coverage ratio was 240%. Meanwhile, the FY dividend rose 5% to 19.37p, consistent with the firm’s ambitions.
Global pension risk transfer (PRT) new business premiums stood at £9.5bn, compared with £7.2bn in 2021, of which 23% were international.
As for US PRT in 2022, the firm wrote two of its largest-ever transactions, each greater than $500m, with strong economic returns.
L&G also secured £459m of Canadian deals through its reinsurance entity and continues to develop strategic partnerships in the region, increasing its overall presence in North America.
L&G writes, “As the only insurer providing PRT directly to pension plans across the UK and the US, we are strongly positioned to offer international pension de-risking solutions.”
Gross longevity exposure was £69.7bn across LGRI’s and Retail’s annuity and longevity insurance businesses.
The firm states, “We have reinsured £32.3bn of longevity risk with seventeen reinsurance counterparties, leaving a net exposure of £37.4bn.
“The reinsurance market continues to grow and innovate, and we expect it to continue to offer sufficient capacity to meet the demand from insurers.”
Sir Nigel Wilson, Legal & Generals Group Chief Executive, commented, “We have delivered another strong result in 2022, ahead of market expectations, with an operating profit of £2.5bn and EPS of 38.3p, both up 12%, cash generation of £1.9bn up 14%, capital generation of £1.8bn up 10%, dividends up 5% to 19.37p and an ROE of 21%.
“Our diversified and highly synergistic business model continues to deliver significant benefits. Our balance sheet is strong and highly resilient, with a record solvency ratio of 236% and we have once again received 100% of cash flows due from our Direct Investments.
“At a time when many households are being affected by the rising cost of living, our commitment to inclusive capitalism is more important than ever to help improve the lives of our customers, build a better society for the long term and create value for our shareholders.”
