Following an upbeat message from Prudential last week, investors "were itching to know" whether Legal & General had also discerned an improvement in private investor sentiment, says Richard Miles in The Times. And Britain's third largest life insurer "did not disappoint". The group cheered the market by claiming signs of a recovery in investor confidence, says Robert Orr in the FT, and also produced a set of sales figures that exceeded expectations. New business sales in the three months to the end of September rose by 8% to £226m, as demand for life protection policies unit trusts and Isas increased. The principal driver of new sales was the threefold rise in the sale of bulk purchase pensions products (where trustees give insurers the responsibility of paying retired staff). New business generated by the company's fund management arm, Legal & General Investment managers, increased by 36% to £4.1bn. Overall sales during the first nine months of 2003 were down by a less-than-expected 4% to £678m.
L&G's performance is "some feat", given how demand has "fallen off a cliff" amid turbulent stockmarkets, says The Independent. The group's strategy of specialising in "simple" products, distributed through link-ups with banks, seems to be working. Partners include Barclays, Alliance & Leicester and Clydesdale, and there are more "in the pipeline". The tie-ups mean that L&G has secured "prime shelf space" at its partner banks before others "muscle in" following next year's relaxation of the rules on selling financial products. Its strong position in the independent financial adviser market also bodes well in this context. Moreover, the £800m it raised last year through a rights issue, along with its sound management and strong brand, should help it to cope with Government plans to reduce charges for savings products. Meanwhile, with people living longer and putting insufficient funds aside for retirement, the "demo- graphics for long-term saving could not be better". The shares, despite a strong run-up, boast a "decent" prospective yield of 4.7%, said the Investors Chronicle, and their rating is "undemanding". 1.2 times net assets "is only a small premium to pay for solid long-term growth", says The Independent.
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