The bulk of this came in the US, with an operating profit of £86m, up 121% per cent on 2008. The underlying improvement was driven by the return to more normal investment conditions, the company said. L&G America, trading as Banner Life and William Penn, is the 8th largest term life insurer in the US.
Profits in European operations also more than doubled in 2009 to £46m, from £20m. In the Netherlands, a focus on term insurance and unit linked savings contracts helped the group weather the financial storms better than many larger market players, the company said.
Sales were down, but the group captured a 5% market share in term insurance and a 22% share of the single premium unit linked market. The increase in profit came from higher interest margins. In France, margins in the savings business were squeezed, despite total written premiums growing by 25%, more than twice the market rate.
In group protection, total premium income was maintained at 2008 levels following a round of cost-cutting and despite difficult trading conditions.
In the final quarter of 2009, the group launched new businesses in India and the Gulf. In India, IndiaFirst a joint venture with Bank of Baroda and Andhra Bank (both majority state-owned banks) with a combined network of 4,500 branches, was launched.
The company said investments in the international businesses and its approach on pricing, underwriting and asset liability management were paying off both in terms of reported profits and cash flow.
As the mature businesses gain scale, they are generating cash to fund their own new business growth and that of the current joint venture businesses in emerging markets.
Mature markets are expected to remain subdued in 2010. In emerging markets, the group said the benefits of expanding using a bancassurance model built on Legal & General’s expertise in the UK were being seen. Bancassurance is likely to be at the heart of further developments in emerging markets.
