Legal & General £3Bn UK Annuity Portfolio acquisition and ... · LEGAL & GENERAL GROUP PLC Capital...

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23 May 2016 Legal & General acquisition of £3bn UK annuity portfolio from Aegon

Transcript of Legal & General £3Bn UK Annuity Portfolio acquisition and ... · LEGAL & GENERAL GROUP PLC Capital...

Page 1: Legal & General £3Bn UK Annuity Portfolio acquisition and ... · LEGAL & GENERAL GROUP PLC Capital position remains strong £8.0bn £7.4bn £5.5bn £5.5bn£12bn £0bn £2bn £4bn

23 May 2016

Legal & General acquisition of £3bn

UK annuity portfolio from Aegon

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LEGAL & GENERAL GROUP PLC

LGR: Back book consolidation one of nine sources of profit

TRANSACTION

DETAILS

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STRATEGY

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SOLVENCY II

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FINANCIAL

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LEGAL & GENERAL GROUP PLC

Capital position remains strong

£8.0bn £7.4bn

£5.5bn £5.5bn

£0bn

£2bn

£4bn

£6bn

£8bn

£10bn

£12bn

£14bn

Solvency II (PRAmethod)

Solvency II (peermethod)

175%

coverage 169%

coverage*

CAPITAL POSITION AS AT 31 DECEMBER 2015

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LEGAL & GENERAL GROUP PLC | YEAR END RESULTS | MARCH 2016

Legal & General Retirement

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LEGAL & GENERAL GROUP PLC

LGR: Market leading, successful growth business

FINANCIAL HIGHLIGHTS 2015 2014 2013 2012

372 292 260 243

45 51 33 14

417 343 293 257

639 428 310 281

43.4 44.2 34.4 32.2

2,744 6,578 4,089 2,339

9.8 9.3 8.7 8.8

201 n/a n/a n/a

FINANCIAL HIGHLIGHTS Q1 2016

410

5

2,274

45.5

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LEGAL & GENERAL GROUP PLC

LGR: Nine sources of profit

BACK BOOK FOR CASH

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UK CAPITAL-LITE FRONT

BOOK

US PENSION RISK

TRANSFER

LONGEVITY

INSURANCE

SECONDARY ANNUITY

MARKET

LIFETIME MORTGAGES

INDIVIDUAL ANNUITIES

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8

GLOBAL REINSURANCE

HUB

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9

BACK BOOK

ACQUISITIONS

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S1-like

release

S1-like

release

S2 capital-

lite

US RBC

S2 capital-

lite

S2

facilitating

risk transfer

S2

S2

S2

Capital

characteristics

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LEGAL & GENERAL GROUP PLC

UK pension risk transfer opportunity

£5.3bn £4.4bn

£7.6bn

£13.2bn £12.3bn

£1.3bn

2011 2012 2013 2014 2015 2016

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Private sector defined benefit liabilities

8%

92%

Annuity transactions

£1.8trn

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LEGAL & GENERAL GROUP PLC

US pension risk transfer opportunity

$0.9bn

$3.8bn

$8.4bn

$13.2bn

$1.1bn

2011 2012 2013 2014 2015 2016

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Annuity transactions

Private sector defined benefit liabilities

4%

96%

$2.6trn

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LEGAL & GENERAL GROUP PLC

Longevity reinsurance: our capital-lite strategy

ANSWERING CLIENT NEEDS

UK

USA

Netherlands

BUILDING OUR BUSINESS

DEEP GLOBAL POOL OF CAPITAL

DEPLOYING OUR SKILL SET

Brand Strength + Execution

LONGEVITY EXPOSURE AS AT 31 DECEMBER 2015

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Capital Management / Reinsurance

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LEGAL & GENERAL GROUP PLC

Our UK USPs

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LEGAL & GENERAL GROUP PLC

Back book to deliver material profits for many yearsProjected future cashflow

before backbook actions*

Undiscounted

2015

Discounted

2015

LGR c.£10bn c.£5bn

£m 2014 2015 2016

- Direct investments

- Lifetime mortgages

- Default outperformance

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Fu

rth

er

up

sid

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Estimated annual projected unwind of LGR VIF**

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Forward looking statements

LEGAL & GENERAL GROUP PLC

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INVESTING for the LONG TERM


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