Legal & General improves capital position in the US

Insurance giant Legal & General said on Monday that it has improved the return on equity (RoE) and profitability of new business within its American subsidiary after completing a further phase of its capital efficiency programme.

Insurance giant Legal & General said on Monday that it has improved the return on equity (RoE) and profitability of new business within its American subsidiary after completing a further phase of its capital efficiency programme.

On December 31st 2012, L&G used a "reinsurance solution" to improve L&G America's (LGA) capital position by replacing the need for temporary financing, a total benefit of $345m, the company said in a statement.

As such, L&G Group's Insurance Group Directive (IGD) surplus has increased by £172m. IGD refers to capital adequacy requirements that insurance companies are subject to.

Since it started in 2010, the capital efficiency programme in total has deliver $735m of capital benefit for LGA and a total benefit to the L&G Group IGD surplus of £402m.

"We are pleased to have delivered these two further phases in 2012, ahead of the schedule indicated at the 2012 half year results," L&G said.

The firm said that this programme has helped LGA grow its core term product over 11 straight quarters, with annual premiums written during the third quarter of 2012 rising by 31% year-on-year from $29m to $38m. Meanwhile, the new business margin has risen from 4.9% in 2009 to 10.9% (in the first half of last year) helped by the more efficient capital structure.

"This December 2012 transaction, as part of a series of related transactions over the last few years, further demonstrates how the US and UK parts of Legal & General work together for a single purpose," said LGA President and Chief Executive Officer Jimmy Atkins.

"It demonstratesour ability to design and execute financial plans as needed to optimise capital across our legal entities, which in turn fuels our strong growth in the US."

Recommended

Best junior stocks and shares ISA platforms
Isas

Best junior stocks and shares ISA platforms

A junior stocks and shares ISA is a great way to save for your child tax-efficiently. But it can be confusing deciding which investment platform to ch…
28 Mar 2023
The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into
2 Mar 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
27 Feb 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023

Most Popular

Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall below £2,000, based on average typical use, from July, for the first time since 2022. We have all the detai…
21 Mar 2023
Government plans could see NS&I boost interest rates
Savings

Government plans could see NS&I boost interest rates

The government-backed bank has a new funding target, which could prompt it to boost the rates on its Premium Bonds, ISAs and bonds.
16 Mar 2023
Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023