The insurance behemoth said its retirement business is experiencing record growth unhindered by wider industry concerns over the introduction of Solvency II in 2016, the uncertainty around Brexit, and what it calls ‘lower for longer’ interest rates.
According to latest figures, L&G’s UK and US unit reported over £400m in bulk annuity business in September alone.
The company also reported strong sales in lifetime mortgages, which L&G only began offering last year, with expected sales likely to exceed £500m in 2016.
In July, L&G signed 5-year distribution agreements with Santander for lifetime mortgages, and Aegon for individual annuities.
Since 30 June, L&G Retirement sales have topped £1.4bn, comprising of £1.2bn for pension de-risking, £130m of lifetime mortgages, and £90m of individual annuities.
L&G said it has started to invest in “US infrastructure assets” to supporting its growing US pensions de-risking business.
“Infrastructure investment forms a key part of our annuity portfolio investment strategy,” said the company. £6.2bn of the annuity portfolio is currently invested in infrastructure assets, of which almost £1bn has been invested this year,” confirmed the company.
However, Kerrigan Procter, managing director of Legal & General Retirement, said the company still need to manage its defined benefit pension plans.
“Legal & General Retirement is on track to double new business sales in 2016. Companies still need to manage their defined benefit pension plans, and people still want to achieve financial security in retirement, regardless of the uncertain political, regulatory or economic backdrop.
“Legal & General entered the lifetime mortgage market last year, and the business has grown rapidly. Customers want more choice in how they fund their retirement, and accessing wealth that is tied up in their home is an attractive solution for asset rich retirees.
Procter added that he expects lifetime mortgages to be “even more popular” with customers in 2017.