Rising interest rates boost Legal & General, CEO says

The brand of Authorized & Common insurance coverage firm is seen at their workplace in central London March 17, 2008. REUTERS/Alessia Pierdomenico

LONDON, Aug 9 (Reuters) – Rising rates of interest are serving to Authorized & Common’s (LGEN.L) enterprise, its chief government stated on Tuesday because the British life insurer recorded an above-forecast 8% rise in first-half working revenue and stated it was on monitor to fulfill or beat its monetary targets.

Markets have fallen this yr as central banks have raised charges aggressively to tame inflation.

However life insurers have a tendency to achieve from larger rates of interest, because it means they should put aside much less capital now to make future pension funds.

“We’re beneficiaries of charges rising internationally,” CEO Nigel Wilson instructed Reuters, including that inflation was being pushed by vitality costs, which had been prone to ease.

“We’ll see inflation expectations come down from the place they’re now.”

L&G’s stated its efficiency was boosted by bulk annuities – insurance coverage of firm outlined profit pension schemes – and its housing companies.

Authorized & Common Funding Administration, one of many largest buyers within the UK inventory market, noticed a big soar in third-party inflows to 65.6 billion kilos ($79.25 billion), greater than double the flows seen within the first half of 2021.

L&G was attracting larger volumes of funding in comparison with smaller friends, Wilson stated, as savers and buyers turned in the direction of greater gamers to assist them navigate difficult financial situations.

However belongings beneath administration dropped 3% from a yr earlier to 1.29 trillion kilos. The unit’s working revenue fell 2%.

Rival asset supervisor abrdn (ABDN.L) posted a 6% drop in belongings beneath administration and administration within the first half on Tuesday. However Schroders (SDR.L) final month posted a 1% rise over the identical interval, helped by a powerful efficiency in various belongings. learn extra

L&G’s working revenue of 1.16 billion kilos topped a consensus of 1.12 billion in a company-supplied ballot.

L&G shares had been down 0.5% at 0729 GMT versus a gradual FTSE 100 . KBW analysts described the outcomes as “strong”, reiterating their “market carry out” ranking on the inventory.

L&G stated it could pay an interim dividend of 5.44 pence per share, up 5%.

($1 = 0.8275 kilos)

($1 = 0.8277 kilos)

Reporting by Carolyn Cohn, enhancing by Sinead Cruise

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