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Creating possibilities for a more secure future
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW – MARCH 2017
Forward looking statements
This document may contain certain forward-looking statements relating to Legal & General
Group, its plans and its current goals and expectations relating to future financial condition,
performance and results. By their nature, forward-looking statements involve uncertainty
because they relate to future events and circumstances which are beyond Legal &
General’s control, including, among others, UK domestic and global economic and
business conditions, market related risks such as fluctuations in interest rates and
exchange rates, the policies and actions of regulatory and Governmental authorities, the
impact of competition, the timing impact of these events and other uncertainties of future
acquisition or combinations within relevant industries. As a result, Legal & General Group’s
actual future condition, performance and results may differ materially from the plans, goals
and expectations set out in these forward-looking statements and persons reading this
announcement should not place reliance on forward-looking statements. These forward-
looking statements are made only as at the date on which such statements are made and
Legal & General Group Plc. does not undertake to update forward-looking statements
contained in this document or any other forward-looking statement it may make.
2 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
3
Introduction
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Corporate profile
• One of the world’s largest insurance and investment management groups, with assets under
management of £894bn (c. $1.1tn) at 31 December 2016.
• Established in London in 1836, we have been providing insurance for our customers for 180 years.
• We are also one of the world’s top 10 asset managers and look after the financial security of over 10
million customers in the UK and US and manage investments for around 3,000 institutional clients.
• We are a FTSE100 company listed on the LSE since 1979 with the ticker: LGEN.LN (ADR: LGCNY).
• As at 8 March 2017, our market capitalisation was £15.0bn.
• Strength of our franchise and the resilience of our balance sheet and capital position is reflected in our
rating profile of Aa3/AA-/AA- (Negative/Stable/Stable).
• A socially aware Group with broad, market leading, customer solutions with a proven track record in earnings.
• Strategy designed to respond to six growth drivers and innovating low cost scalable operating models.
• A strong balance sheet with disciplined capital management and sustainable cash generation, supporting both
organic growth and bolt-on acquisitions and directed by an empowered, experienced management team.
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017 4
Strong trading performance • Adjusted operating profit up 11% to £1,628m
• Net release from operations up 12% to £1,411m
Balance sheet efficiency underpins shareholder returns • 19.6% adjusted return on equity
• Sustainable improvement in RoE in last years
Resilient Solvency II balance sheet • SII surplus at £5.7bn
• 171% coverage ratio on a shareholder basis
All figures are FY2016 to 31 December 2016.
Investment case • Focus on attractive high growth markets, coupled with increasing expertise, is expected to deliver
further profit growth, built on resilient IFRS and Solvency II balance sheets
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017 5
LEGAL& GENERAL RETIREMENT (LGR)
LEGAL& GENERAL INVESTMENT MANAGEMENT
(LGIM) LEGAL& GENERAL CAPITAL (LGC) LEGAL & GENERAL INSURANCE (LGI)
With around one million customers, our corporate
business helps de-risk defined benefit pension
schemes in the UK, US and Netherlands. Our
individual business helps customers manage their
retirement income with a range of solutions
including boosting funds in retirement with the
equity in their homes.
Our global asset management business manages
investments on behalf of institutional and retail
customers, with a broad range of fund management
services. We have a growing international focus.
Our objectives are to increase the risk adjusted
returns on the group’s principal balance sheet and
provide better access to assets. Our direct
investments focus on housing, infrastructure and
alternative finance and support our social purpose.
In the UK, we have around five million individual life
insurance customers and around two million people
in group protection schemes. Our US life insurance
business has 1.2 million customers.
In LGR, demand for pension de-risking strategies
remains strong. We are currently quoting on
c.£13bn of buy-in and buy-out deals in the UK. We
will remain disciplined in the deployment of our
capital, and will only select PRT and longevity
opportunities that meet our return on capital hurdle
rates. In October 2016, we commenced a
distribution agreement with Aegon to offer our
individual annuities to their pension customers with
sales of c.£190m expected in the first 12 months.
The lifetime mortgage market is expected to grow to
£2.8bn in 2017 and we anticipate writing c.£0.8bn
of new business in the year.
LGIM is targeting further outperformance of market net
fund flows. We will continue our investment in
technology, client propositions and overseas distribution
to maintain momentum in net flows. Our market leading
Solutions business is well placed to support DB pension
schemes as they de-risk. In the defined contribution
(DC) market, LGIM continues to gain market share and
we expect the number of members of our workplace
schemes to increase to around 2.5m in 2017. We
expect our US business to expand its asset base in
Index, Active Fixed Income and Solutions as we seek to
establish ourselves as a leading US pension solutions
provider.
LGC is planning to invest over £0.5bn of shareholder
capital in direct investments in 2017. In Housing, we
plan to expand our build to sell and build to rent
businesses into affordable and senior living, which will
incorporate modern factory construction methods. For
the Infrastructure sector, we will build on our
successful Urban Regeneration model, increasing the
number of cities we invest in. We will also expand our
SME funding initiatives across equity and new debt
products.
In LGI, we expect operating profit to grow in 2017 as
we have started the process of addressing areas of
poor performance in our UK group protection
business. Although operating in a mature sector, our
UK leading retail protection business is targeting
further operating profit growth in 2017, and will
continue to provide good customer outcomes and
attractive returns for our shareholders. We will also
focus on accelerating the digital transformation of our
US protection business including diversifying
distribution and products, building on our proven
expertise in the UK.
LGR 2016 Assets: £54.4bn
(2015: £43.4bn)
LGIM 2016 AUM: £894bn
(2015: £746bn)
2016 Direct Investments: £10.0bn*
(2015: £7.2bn*) * across the Group
Insurance 2016 GWP: £2.4bn
(2015: £2.2bn)
SAVINGS Our savings business looks after traditional UK life and pensions savings products. Our Mature Savings
operation is largely closed to new business. We will continue to focus on customer service whilst actively
managing costs.
Mature Savings AUA 2016 : £31bn
(2015 : £30bn)
GENERAL INSURANCE Our UK general insurance business has around 1.3 million customers. In General Insurance, we see the potential
to grow the business through distribution agreements and increased growth in the direct channel. Recently
signed distribution agreements in aggregate are expected to increase gross premiums by c.10% in 2017. Despite
recent poor weather in the UK, General Insurance has had a strong start to 2017, however, exceptional weather
events can impact future profitability.
General Insurance GWP 2016: £326m
(2015 : £337m)
Financial highlights: continuing strong financial performance
6
Net release from operations
£1,411m (2015: £1,256m)
+12%
Profit after tax
£1,265m (2015: £1,094m)
+16%
Adjusted operating profit
£1,628m (2015: £1,463m)
+11%
Earnings per share1
22.20p (2015: 18.58p)
+19%
Full year dividend
14.35p (2015: 13.40p)
+7%
IFRS return on equity2
19.6% (2015: 17.7%)
1. Represents adjusted earnings per share (EPS) which is
calculated by dividing profit after tax by the weighted average
number of ordinary shares in issue during the period. This
excludes a £60m net loss arising on the disposal of Suffolk Life
and Cofunds. Unadjusted EPS is 21.22p, up 17%
2. Return on equity (ROE) is calculated by dividing full year profit
after tax attributable to equity holders of the Company by the
average shareholders’ equity during the period, excluding the
£60m net loss as per note 1. Unadjusted ROE is 18.8%
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
7
Group Strategy
Focused, high performing business aligned to key long term structural
growth drivers
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017 8
DRIVING SUSTAINABLE EARNINGS
CONTINUED PROGRESS
LGR ASSETS INCREASED FROM £28BN in 2011
TO £54BN IN 2016
LGIM AUM GROWN FROM £204BN IN 2005 TO
£894BN IN 2016
DIRECT INVESTMENTS TARGET OF £15BN BY
2020
TO DATE: £10BN
UK DEFINED CONTRIBUTION ASSET GROWTH
FROM £24BN IN 2011 TO £57.1BN IN 2016
LOW COST OPERATING MODELS (BACK END)
CONSUMER ENGAGEMENT MODELS (FRONT
END)
GLOBAL
DEMOGRAPHICS
GLOBALISATION OF
ASSET MARKETS
CREATING NEW REAL
PRODUCTIVE ASSETS
REFORM OF THE
WELFARE STATE
TECHNOLOGICAL
INNOVATION
GROWTH DRIVERS
PROVIDING TODAY’S
CAPITAL
OUR CAPABILITIES
RETIREMENT
SOLUTIONS
INTERNATIONALLY
REPLICABLE MODEL
DIRECT
INVESTMENTS
BEVERIDGE 2.0
DIGITAL BUSINESS
AND CONSUMER
SOLUTIONS
INVESTING DIRECTLY
OR THROUGH
PARTNERSHIP
PRECISION BUILT HOUSING
SME DEBT AND EQUITY FINANCING
LONG TERM INFRASTRUCTURE INVESTMENT
Clear and consistent strategy: excellent execution
Growth drivers 2016 achievements
Ageing
demographics
• LGR record transactions £8.5bn, up 190%, including 6 US pension de-risking transactions
• £620m Lifetime mortgages sales, target £500m, voted best equity release / lifetime lender
• Agreement with Aegon to offer individual annuities to its vesting book of DC customers
• Solutions assets of £412bn, up 22%, UK market leader with 45% share
Globalisation of
asset markets
• 252 US clients with £118.5bn assets, 4 of top 5 US DB pension funds
• Successfully winning US DC mandates, net flows £9.4bn (2015: £6.3bn)
• LGIM distribution agreements in Japan with Nikko Asset Management and Meiji Yasuda
• Partnering with Dutch investors in ‘Build to Rent’
• Partnering with global investors in SME finance (Pemberton)
• LGIM total AUM of £894bn, up 20%, International AUM of £177bn, up 45%
Creating real assets • £10bn of group-wide direct investments, up 39%
• £940m ‘Build to Rent’ housing pipeline with new homes in Salford, Bristol and Walthamstow
• UK infrastructure investments in London Gateway Port, Stratford, and Newcastle
Welfare reforms • Market leading UK retail protection business, over 25% market share
• UK DC assets £57.1bn, up 24%
• DC bundled provider for Tesco Plc, with over 200,000 employees, more to follow, 50bps price cap
• 2.2m customers in over 9,000 schemes
Technological
innovation
• Retail protection direct sales up 7%, General Insurance direct sales up 20%
• My Account: nearly 900k users with c.450k new customers signed up in 2016.
• Investment and partnership with Smart Pension, a Fintech auto-enrolment pension provider
Today’s capital • SME debt finance, Pemberton‘s final close at €1.2bn, with 80% external investment
• SME equity finance, £150m venture with Woodford Investment Management & British Business Bank
9 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Driving growth: increasing stock
10
LGIM AUM growth (£bn)
13% CAGR
LGR assets growth (£bn)
14% CAGR
543 612
694 746
894
2012 2013 2014 2015 2016
32.2 34.4
44.2 43.4
54.4
2012 2013 2014 2015 2016
2.2
2.4
2.5
2.6
2.7
2012 2013 2014 2015 2016
1.3 2.7
5.7
7.2
10.0
2012 2013 2014 2015 2016
UK & US Insurance premium growth (£bn)
6% CAGR
Direct Investments (£bn)
67% CAGR
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
846 865 1,002
1,104
1,256
1,411
2011 2012 2013 2014 2015 2016 2020
Earnings per share (p)
11% CAGR 2011 - 2015
12.42 13.84
15.20 16.70
18.58
22.20
2011 2012 2013 2014 2015 2016 2020
Net release from operations (£m)
10% CAGR 2011 - 2015
Our financial ambition is a similar performance in 2016 – 2020 to that
achieved in 2011 - 2015 Our Strategic goals to 2020:
• Achieve global leadership in pensions
de-risking and provide a suite of products
to maximise retirement income
• Help people achieve security affordably
through insurance and workplace pensions
• Use our existing skills and expertise to
build a world class international asset
management business
• Use ‘slow money’ to become the UK leader
in direct investments including housing and
urban regeneration
• Achieve market leadership in digital provision
of insurance and retail investments
• To be a leader in financial solutions and a
globally trusted brand
11 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
12
Full Year Results 2016
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
2011 2012 2013 2014 2015 2016
NET RELEASE FROM
OPERATIONS (£m) 846 865 1,002 1,104 1,256 1,411
DIVIDEND (£m) 375 452 550 668 797 854
NET RELEASE FROM
OPERATIONS RETAINED (£m) 471 413 452 436 459 557
DIVIDEND COVERAGE 2.26 1.91 1.82 1.65 1.58 1.65
DIVIDEND PER SHARE (p) 6.40 7.65 9.30 11.25 13.40 14.35
RETURN ON EQUITY (%) 14.9 15.4 16.1 16.9 17.71 19.62
EARNINGS PER SHARE (p) 12.42 13.84 15.20 16.70 18.581 22.202
BOOK VALUE PER SHARE (p) 86 92 94 100 106 116
Key financials: strong growth, attractive returns
13
N.B. Dividend coverage based on net cash generation
1. Excluded £25m loss in relation to disposals of Legal & General France, Gulf, Egypt and Ireland.
2 .Excludes £60m loss in relation to disposals of Suffolk Life and Cofunds.
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
2016 2015 YoY (%)
ASSETS &
PREMIUMS
LGIM AUM (£bn) 894.2 746.1 20
Annuity assets (£bn) 54.4 43.4 25
Direct investments (£bn) 10.0 7.2 39
UK protection and GI gross premiums (£m) 1,838 1,779 3
Consistent delivery: strong results
14
CASH &
EARNINGS
Release from operations (£m) 1,256 1,217 3
Net release from operations (£m) 1,411 1,256 12
Adjusted operating profit (£m) 1,628 1,463 11
IFRS profit before tax (£m) 1,582 1,355 17
Adjusted earnings per share (pence) 22.20 18.58 19
CAPITAL
Shareholder basis: Solvency II surplus1 (£bn) 5.7 5.5
Shareholder basis: Solvency II coverage ratio1 (%) 171 176
Economic capital surplus (£bn) 8.3 7.6
Economic capital coverage ratio (%) 230 230
Adjusted return on equity (%) 19.6 17.7
1. The Solvency II shareholder basis adjusts for the Own Funds and SCR of the With-profits fund and our final salary pension schemes.
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Strong growth: Operating profit from divisions
15
DIVISION 2016
(£m)
2015
(£m) YoY (%)
Legal & General Retirement (LGR) 811 641 27
Legal & General Investment Management (LGIM) 366 355 3
Legal & General Capital (LGC) 257 233 10
Legal & General Insurance (LGI) 317 315 1
General Insurance (GI) 52 51 2
Savings 99 107 (7)
Operating profit from divisions 1,902 1,702 12
Operating profit from divisions (£m)
10% CAGR
1,277 1,329 1,483
1,702 1,902
2012 2013 2014 2015 2016
43%
19%
13%
17%
3% 5%
LGR
LGIM
LGC
LGI
General Insurance
Savings
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
16
Capital Position
£5.9bn £5.9bn £6.3bn
£7.3bn
£8.3bn £7.9bn
£7.6bn £8.1bn
£8.3bn
£5.5bn £5.3bn £5.7bn
£0bn
£2bn
£4bn
£6bn
£8bn
£10bn
£12bn
£14bn
YE 2015 H1 2016 YE 2016 YE 2015 H1 2016 YE 2016
Robust capital position
176% 230%
Capital requirement Surplus
Economic Capital is the amount of capital that the Board believes
the Group needs to hold, over and above its liabilities, in order to
meet the Group’s strategic objectives.
The figures incorporate management’s estimate of the impact of
recalculating the Transitional Measures for Technical Provisions
(TMTP) as at the end of 2016 as we believe this provides the most
up to date and meaningful view of our Solvency II position. The
conditions set out by the PRA to allow a formal recalculation of the
Group’s TMTP were not met as at end 2016 but, in line with PRA
guidance, a formal recalculation will take place no later than 1st
January 2018.
On a Solvency II proforma basis including the Own funds and SCR
of the With-profits fund and our final salary pension schemes, the
Group’s Solvency II coverage ratio was 165%, with Eligible Own
funds of £14.3bn and SCR of £8.6bn
CAPITAL POSITION
• Solvency II surplus of £5.7bn
• The Solvency II shareholder basis adjusts for
the Own Funds and SCR of the With-profits
fund and our final salary pension schemes
• Solvency II capital requirement increase
driven primarily by lower interest rates and
new business. Economic capital requirement
less sensitive to these impacts
• Core tier 1 own funds of £11.0bn (81%)
• S&P credit rating AA-
Economic Capital Solvency II
Coverage
Ratio 230% 171%
£13.5bn £14.6bn £12.8bn £13.6bn
17
Shareholder basis
£14.0bn
235% 163%
£13.6bn
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
2016
£bn Comments
Operational surplus generation 1.2 • Substantial and diversified expected releases
New business strain (0.1) • Capital efficient annuity sales
• Positive contribution from insurance new business
Net Surplus Generation 1.1
Dividends paid (0.8) • Final 2015 £592m + Interim 2016 £238m = Total £830m
Operating variances 0.2
Over time, we expect these movements to be neutral
Market movements (0.3)
Total Surplus over year 0.2
Movement in the Solvency II surplus
18 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Estimated Solvency II new business value metric
MARK GREGORY: GROUP CHIEF FINANCIAL OFFICER
• The new metric provides a measure of the value created in the business allowing for the run-off of Solvency II capital
• Follows the principles of EEV, but assumes profit emergence on Solvency II basis. Other methodologies are unchanged
• Expected experience is unaffected by moving from a Solvency I to a Solvency II regime, i.e. the best estimate cash flows
are the same
• For annuities business the Solvency II basis generates more strain than Solvency I (implying lower profit margin)
• For protection business the Solvency II strain is lower (implying higher profit margin)
FY 2016 PVNBP
Contribution
from New
Business
Margin %
UK Annuity business LGR (£m) 6,661 693 10.4
UK Insurance Total (£m) 1,466 153 10.4
Retail protection 1,255 139 11.1
Group protection 211 14 6.6
LGA (£m) 631 78 12.4
SUBTOTAL (£m) 8,758 924 10.6
19 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
20
High quality capital resources
1. Eligible Own Funds do not include an accrual for the dividend of £616m (2015: £592m) declared after the balance sheet date. 2. The SCR is not subject to audit 3. Coverage ratio is calculated on unrounded values
Capital position (£bn) 2016 2015
Core tier 1 Own Funds 11.0 10.6
Tier 1 subordinated liabilities 0.6 0.6
Tier 2 subordinated liabilities 2.1 2.0
Eligibility restrictions (0.1) (0.4)
Own Funds1 13.6 12.8
Solvency Capital Requirement (SCR)2 (7.9) (7.3)
Solvency II surplus 5.7 5.5
SCR coverage ratio3 (%) 171% 176%
• 81% of our £13.6bn of
Solvency 2 own funds
were core tier 1 assets.
• These core tier 1 assets
alone were £3.1bn more
than the Group's capital
requirement.
21
Operating Unit Performance
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
FINANCIAL HIGHLIGHTS 2016 2015
Release from operations (£m) 433 374
New business surplus (£m) 159 45
Net release from operations (£m) 592 419
Operating profit (£m) 811 641
Profit before tax (£m) 847 719
Total annuity AUA (£bn) 54.4 43.4
Of which: Direct investments (£bn) 8.1 5.7
Solvency II new business margin1 (%) 10.4
Solvency II new business value add1 (£m) 693
Backbook acquisition (£m) 2,945 -
UK Pension risk transfer (£m) 3,338 1,977
US Pension risk transfer (£m) 347 295
Netherlands Pension risk transfer (£m) - 145
Individual annuities (£m) 378 327
Total Annuity sales (£m) 7,008 2,744
Longevity insurance (£m) 900 -
New lifetime mortgages (£m) 620 201
Total sales (£m) 8,528 2,945
LGR: Delivering exceptional profit growth
22
• Operating profit of £811m up 27%, reflecting:
- increased scale of business
- profitable new business written in 2016
- impact of positive mortality experience
- longevity insurance reserve
model refinement
• Total new business sales of £8.5bn up 190%:
- annuity premium of £7.0bn, including
£2.9bn backbook acquisition from
Aegon and 6 US PRT deals totalling
£347m ($448m)
- £900m reinsured longevity insurance deal
transacted in December
- focus on return on capital, delivering strong
Solvency II new business margin of 10.4%
and future surplus releases
- £620m lifetime mortgage sale reflecting
strong growth since entry in May 2015 with
29% market share in 2016
1. Excludes US PRT business LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
£378m
£744m
46%
49%
30
35
40
45
50
55
60
65
70
0
200
400
600
800
2010 2011 2012 2013 2014 2015 2016
Revenue Expenses C:I Ratio
LGIM: Resilient performance in challenging markets
FINANCIAL HIGHLIGHTS 2016 2015
Operating profit (£m)* 366 355
Total revenue (£m) 744 694
Total expenses (£m) (372) (335)
Closing AUM (£bn) 894 746
International AUM (£bn) 177 122
DC AUM (£bn) 57 46
Retail AUM (£bn) 24 20
Cost:income ratio (%) 49 48
• LGIM operating profit up 3%; Asset
Management operating profit excluding the
one off adjustment for box profits, up 7%
• Steady cost income ratio of c.50%
• External net flows of £29.2bn, with higher
net inflows across all regions
• DC business continues to expand with
more than 2.2m clients on its workplace
platform (2015: 1.8m) and £57.1m in AUM
• Retail business ranked third in UK net
sales in 2016 (Pridham)
• International expansion continues, with
AUM up 45% at £177.4bn (2015: £122.4bn)
• Majority of our funds outperformed their
respective benchmarks over 1, 3 and
5 years
REVENUE GROWTH WITH A STEADY MARGIN
*Operating profit includes Workplace Savings 2016: £(6)m (2015: £(4)m)
23
12% CAGR
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
FINANCIAL HIGHLIGHTS 2016 2015
Net release from operations (£m) 214 187
Operating profit (£m) 257 233
- Direct Investments 121 69
- Traded Portfolio and other 136 164
Profit before tax (£m) 419 117
- Direct Investments 94 73
- Traded Portfolio and other 325 44
Assets (£m) 6,193 5,665
- Direct Investments1 1,137 867
- Traded Portfolio and other 5,056 4,798
Net portfolio return % 7.4 2.3
- Direct Investments 9.0 9.2
- Traded Portfolio and other 7.0 1.0
LGC: Realising profits through asset creation
24
1. Direct Investment assets exclude two LGC assets valued at £91m at 31 December 2016 which have entered advanced
disposal negotiations and are classified as “assets held for sale” and reported separately.
• Operating profit and PBT from Direct
Investments increase year on year by
75% and 29% respectively
• 44% of Direct Investment operating
profit delivered from LGC’s share of
operating businesses’ profit
• PBT of Direct Investments is based on
independent valuation of assets, or
trading profits from our investments
• Direct investments earned a net portfolio
return of 9.0% and an average 33%
return on solvency capital
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
25
FINANCIAL HIGHLIGHTS 2016 2015
Release from operations (£m) 317 327
New business surplus (£m) 23 25
Net release from operations (£m) 340 352
Operating profit (£m) 317 303
UK & US Gross written premium (£m) 2,409 2,215
UK Protection Solvency II margin (%) 10.4
US Protection Solvency II margin (%) 12.4
LGI: A growing book, flat operating profit
• Operating profit flat year on year with
adverse claims experience in UK
Group Protection
• Robust result driven by strong expense
discipline and continued strong Retail
Protection performance
• Agreement in principle with Chesnara to
dispose of Legal & General Netherlands
for €160m. Expected to complete in H1
2017. LGN contributed £16m operating
profit in both 2015 and 2016
LGI prior year comparator excludes Legal & General France (£12m operating profit), which was disposed of in 2015
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
GI: Strong results in a competitive market
26
FINANCIAL HIGHLIGHTS 2016 2015
Net release from operations (£m) 42 41
Operating profit (£m) 52 51
Profit before tax (£m) 68 43
Gross written premium (£m) 326 337
Of which: Direct channel GWP (£m) 121 101
Combined operating ratio (%) 89 89
• Operating profit up 2% to £52m as a result
of disciplined expense management and
claims control, along with relatively benign
weather experience, and in spite of a
competitive market leading to a reduction
in gross written premium
• Profit before tax of £68m up 58% as a
result of strong investment performance
• 37% of sales through direct channel,
representing 20% growth on 2015
• 2016 combined operating ratio of 89%
includes the annual cost of the Flood Re
levy of £9m paid in April 2016, adding 3%
to the combined operating ratio
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
Savings: Delivering on our promise to simplify operations and
enhance digital solutions
27
• Reduction in release from operations
due to decline in book
• Mature operating profit sustained
through market growth and operational
efficiencies as a result of productivity
improvements and automation
• Increased engagement of customers
via digital channels
• The sale of Cofunds/IPS for £147.5m
was completed on 1st January 2017
• Digital Savings contributed £6m
operating loss in 2016
FINANCIAL HIGHLIGHTS 2016 2015
Release from operations (£m) 104 125
New business strain (£m) (5) (9)
Net release from operations (£m) 99 116
Operating profit (£m) 99 107
Of which: Mature Savings (£m) 105 106
Of which: Digital Savings (£m) (6) 1
Mature Savings assets (£bn) 30.7 29.6
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
28
Proposed Offering
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Summary of Terms & Conditions*
29
Issuer Legal & General Group Plc
Instrument US$[•]m Fixed Rate Reset Subordinated Notes (the “Notes”)
Expected Issue Rating [BBB+]/[Baa1(hyb)] (S&P/Moody’s)
Interest [•] per cent. per annum payable semi-annually in arrear until the First Call Date, and thereafter reset every [5] years to [5] year mid-swap plus initial credit spread plus
step-up
Coupon Step-up 100bps on the First Call Date
Optional Redemption [●] 20[27] (the “First Call Date”) and each Reset Date thereafter subject to the redemption conditions
Status / Subordination of the Notes
Direct, unsecured and subordinated obligations of the Issuer that rank pari passu and without any preference among themselves
Subordinated to the claims of all Senior Creditors of the Issuer but shall rank at least pari passu with all other obligations of the Issuer which constitute Tier 2 Capital
(other than Existing Undated Tier 2 Securities) (“Pari Passu Securities”) and shall rank in priority to: (i) the claims of holders of Existing Undated Tier 2 Securities; (ii) all
obligations of the Issuer which constitute Tier 1 Capital; and (iii) the claims of holders of all classes of share capital of the Issuer (“Junior Securities”)
Solvency Condition All payments outside of a winding-up are conditional on the Issuer being solvent at the time of payment
Maturity Date [•] 20[47], subject to the redemption conditions
Optional Interest Deferral Optional cumulative deferral of interest on any interest payment date other than a Compulsory Interest Payment Date or a Mandatory Interest Deferral Date
Compulsory Interest Payment Date (Dividend Pusher)
Any Interest Payment Date on which the Solvency Condition is satisfied and is not a Mandatory Interest Deferral Date and the Issuer has made, in the immediately
preceding six months, subject to certain exceptions (i) any declaration/payment of dividend/distribution or coupon on the Issuer’s ordinary shares, Junior Securities or Pari
Passu Securities; or (ii) any redemption/repurchase for cash of the Issuer’s ordinary shares, Junior Securities or Pari Passu Securities
Mandatory Interest Deferral
Mandatory cumulative deferral of interest upon any event (including breach of the Solvency Capital Requirement or Minimum Capital Requirement applicable to the
Issuer, the Group or any insurance undertaking within the Group) which under the Relevant Rules would require the Issuer to defer payment of interest and the Relevant
Regulator has not waived the requirement to defer payment of interest under the Notes (a “Regulatory Deficiency Interest Deferral Event “)
Arrears of Interest:
Deferred interest will constitute Arrears of Interest and shall not themselves bear interest
Subject to meeting the Solvency Condition, regulatory consent (if required) and a Regulatory Deficiency Interest Deferral Event not subsisting, any Arrears of Interest may
be paid in whole or in part at any time and will become due and payable in whole (and not in part) upon the earliest of (i) the next Interest Payment Date on which
payment of interest is made (other than a voluntary payment of Arrears of Interest); (ii) winding-up of the Issuer or the date on which any administrator of the Issuer gives
notice that it intends to declare and distribute a dividend; or (iii) redemption or purchase of Notes by or on behalf of the Issuer
Early Redemption/ Substitution or Variation
In case of a Tax Law Change (causing either re-characterisation of interest as a distribution or a requirement to gross up for withholding tax), Capital Disqualification
Event (loss of Tier 2 regulatory capital treatment) or a Rating Methodology Event (material reduction in rating agency equity credit), the Issuer may redeem the Notes at
par, or substitute or vary the terms of the Notes to remedy such event (provided the resulting notes have terms not materially less favourable to an investor than the
terms of the Notes and comply with Tier 2 regulatory requirements and, in the case of a Rating Methodology Event, rating agency equity credit criteria), subject to the
redemption conditions and in the case of redemption prior to year 5, subject to prior replacement with equal or better quality capital
Mandatory Redemption Deferral
Mandatory deferral of any scheduled redemption upon any event (including an Insolvent Insurer Winding-up, breach of Solvency Capital Requirement or Minimum Capital
Requirement applicable to the Issuer, the Group or any insurance undertaking within the Group) which under the Relevant Rules would require the Issuer to defer
repayment or redemption of the Notes and the Relevant Regulator has not waived the requirement to defer repayment or redemption of the Notes (a “Regulatory
Deficiency Redemption Deferral Event”)
Insolvent Insurer Winding-up
The winding-up or the appointment of an administrator of any insurance undertaking within the Group where the claims of the policyholders pursuant to a contract of
insurance of that insurance undertaking which is in winding-up or administration may or will not be met
Law/Listing/Denoms English/ London/ US$200k + US$1k
*All as more fully defined in the Legal & General Group PLC Base Prospectus dated 27 May 2016 (as so supplemented by the supplementary prospectus dated 31 August 2016, and as will be subsequently supplemented to incorporate by reference certain sections of the consolidated annual report and audited accounts of L&G, its subsidiaries and its subsidiary undertakings for the year ended 31 December 2016 as announced by L&G on 8 March 2017) and the preliminary final terms. Source: Capitalised terms used in this summary and not otherwise defined shall have the meanings ascribed to them in the Terms and Conditions of the Notes
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Structural Comparison L&G AXA La Mondiale Zurich L&G
Issue Date [l] 2017 Jan 2017 Jan 2017 Mar 2016 Oct 2015
First Call Date [l] 20[27] Jan 2027 Jan 2027 Jun 2026 Oct 2025
Maturity [l] 20[47] Jan 2047 Jan 2047 Jun 2046 Oct 2045
Issuer Rating
(Senior) A3 / A A2 / A - / A- Aa3 / AA- A3 / A
Issue Rating [Baa1(hyb)]/[BBB+]1 A3(hyb) / BBB+ - / BBB A2(hyb) / A Baa1(hyb) / BBB+
Size US$ [•]m US$ 1,000m US$ 530m US$ 1,000m GBP 600m
Initial Coupon [•]% semi-annually 5.125% semi-annually 5.875% semi-annually 5.625% annually 5.375% semi-annually
Step-Up/Reset2 100bp in year 10 / 5-year
US$ mid-swap +[l] 100bp in year 10 / 3m$L+388.3bp
100bp in year 10 / 5-year US$
mid-swap + 448.2bp 100bp in year 10 / 3m$L+491.8bp
100bp in year 10 / 5-year UKG +
458bp
Denomination US$ 200k/1k US$ 200k/2k US$ 200k/1k US$ 200k/1k £100k / 1k
Optional Interest
Deferral
At issuer’s discretion, subject to 6-
month dividend pusher
At issuer’s discretion, subject to 6-
month dividend pusher
At issuer’s discretion, subject to 6-
month junior and parity security
pusher
At issuer’s discretion, subject to
6-month junior and parity security
pusher and dividend pusher
At issuer’s discretion, subject to
6-month dividend pusher
Mandatory
Interest Deferral
Breach of solvency condition or
Solvency Capital Requirement
Breach of Solvency Capital
Requirement
Breach of Solvency Capital
Requirement
Upon Solvency Event (breach of
regulatory capital requirements)
Breach of solvency condition or
Solvency Capital Requirement
Nature of Deferral Cumulative Cumulative Cumulative Cumulative Cumulative
Capital
Disqualification
Event Call
At par, when Notes are no longer
capable of counting as Tier 2
Capital
At par, when Notes are no longer
capable of counting as Tier 2
Capital
At par, when Notes are no longer
capable of counting as Tier 2
Capital
At par, when Notes are no longer
capable of counting as regulatory
capital
At par, when Notes are no longer
capable of counting as Tier 2
Capital
Redemption
Deferral
Breach of solvency condition or
Solvency Capital Requirement or
Insolvent Insurer Winding-up
Breach of Solvency Capital
Requirement or Insolvent Insurer
Winding-up
Breach of Solvency Capital
Requirement or Insolvent Insurer
Winding-up
Upon Solvency Event (breach of
regulatory capital requirements)
Breach of solvency condition or
Solvency Capital Requirement or
Insolvent Insurer Winding-up
Liquidation
Ranking Subordinated to senior debt Subordinated to senior debt Subordinated to senior debt Subordinated to senior debt Subordinated to senior debt
30
1Expected rating 2Reset rate includes 100bp step-up
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Capital Position: Debt Profile
31
DEBT REDEMPTION PROFILE1 Nominal Value (£m)
0
200
400
600
800
1000
2017 2018 2019 2020 2021 2025 2026 2027 2031 2032 2033 2044
Grandfathered Tier 1 Grandfathered Tier 2 SII Tier 2 Senior Proposed Offering
RATING
TYPE
ENTITY /
INSTRUMENT S&P MOODY’S
Financial
Strength
Rating
L&G Assurance
Society Ltd AA- Aa3
Instrument
Credit
Ratings
Senior Debt A A3
Tier 2 BBB+ Baa1
Tier 1 BBB+ Baa2
Outlook - Stable Negative
ISSUE
DATE ISSUER STATUS
RATING
(MOODY’S / S&P) CURRENCY
AMOUNT
(M)
COUPON
(%)
FIRST
CALL DATE
MATURITY
DATE
Apr 07 Legal & General Group plc Grandfathered
Tier 1 Baa2 / BBB+ GBP 600 6.385 May 2017 Perpetual
Mar 04 Legal & General Group plc Grandfathered
Tier 2 Baa1 / BBB+ GBP 400 5.875 April 2019 Perpetual
Jul 09 Legal & General Group plc Grandfathered
Tier 2 Baa1 / BBB+ GBP 300 10.0 July 2021 July 2041
Oct 15 Legal & General Group plc SII Tier 2 Baa1 / BBB+ GBP 600 5.375 October 2025 October 2045
Nov 00 Legal & General Finance plc Senior A3 / A GBP 350 5.875 - December 2031
Mar 02 Legal & General Finance plc Senior A3 / A GBP 200 5.875 - April 2033
Jun 14 Legal & General Group plc Grandfathered
Tier 2 Baa1 / BBB+ GBP 600 5.5 June 20442 June 2064
2
1Maturity date shown as the earliest of first call date and maturity. Legal & General outstanding debt and capital instruments greater than £100m. 2 In 2026, the notes cease to qualify as regulatory capital following the expiry of the grandfathering regime. 3 Proposed offering of benchmark size in USD. GBP/USD rate of 1.2249 used for indicative purposes.
3
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
32
Management Team
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Speaker Biographies
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017 33
Mark Gregory
Chief Financial Officer until 9 March 2017
Jeff Davies
Chief Financial Officer from 9 March 2017
Mark Gregory was appointed as Group Chief Financial Officer on 1 July 2013.
Mark joined Legal & General in 1998 from Asda Group Plc where he held both senior finance and business development roles.
He has undertaken a variety of divisional finance and business director roles at Legal & General including Financial Director (Retail),
Group Financial Controller, Communications and Resources Director, Resources and International Director, UK Services Operations
Director and Managing Director of With Profits.
Mark was appointed as Chief Executive Officer of the Savings business and a director of the Board in January 2009.
Mark is a qualified chartered accountant.
Jeff will be appointed Legal & General’s Group Chief Financial Officer on 9 March 2017.
Prior to that, he was a senior partner at Ernst & Young LLP (EY) holding practice and market leadership roles in the UK and across
Europe.
He joined EY in 2004 and worked closely with many of the large multinational insurers, specialising in Solvency II and capital
management. Prior to this, he was with Swiss Re where he held a number of senior actuarial roles.
He is a Fellow of the Institute of Actuaries.
Frank Turley
Group Treasurer
Frank joined Legal & General in 2011 and was appointed Group Treasurer in 2012. He has 20 years’ experience in Treasury & Global
Markets spanning Treasury, Fixed Income, Derivatives & Equities; 18 years with HSBC Global Markets and 2 years with ANZ.
Frank's career started in the UK and he has worked extensively in Asia and the Middle East.
Frank is a Fellow of the Institute of Actuaries.
34
Appendix – Business Update
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
LGR : Eight sources of profit
Back book for cash
and capital
• Existing £54.4bn annuity portfolio – generated £433m operational release and £592m
net release in 2016
• Asset strategy being optimised with direct investments and lifetime mortgages
Back book acquisitions
• Acquisition of £2.9bn Aegon UK back book in H1 2016
• Successfully completed £1.4bn Lucida transaction in 2013
• c.£100bn of UK individual annuity back books opportunities
UK capital efficient
front book
• Evolving to meet anticipated demand, £2.1trn of DB liabilities in the UK
• £3,338m written in 2016 with low single digit capital strain (as % of premium)
• Currently quoting on around £13bn of buy-in / buy-out deals
Longevity Insurance • Successfully written £900m longevity insurance transaction in December 2016 and
reinsured longevity risk at the same time
• Total of £6.9bn of longevity insurance deals completed since 2011
US pension risk transfer • 6 deals written in 2016 totalling $448m
• First US PRT transaction in 2015 ($450m)
Global reinsurance hub • First Dutch deal in Dec 2015. A+ rating from Fitch and S&P. Achieved DNB registered
reinsurer status in 2016
Individual retirement • Strong individual annuity sales growth of 16% at £378 million in 2016 (£327m FY15)
• Distribution agreement with Aegon increases future flows
Lifetime mortgage • £1.5trn of housing equity owned by the over 55’s in the UK; Long term illiquid asset
creation for our annuity fund
• Strong entry into the market since entry in May 2015 with £620m sales in 2016 (£201m
FY15)
35 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
LGR: Delivering strong growth
36
590
1,211
1,668
1,140
1,531 201
620
2012 2013 2014 2015 2016
DI Lifetime Mortgage
Annuity single premium (£m)
32% CAGR
New direct investments (£m)
38% CAGR
Profit Before Tax (£m)
37% CAGR
239
373
495
719
847
2012 2013 2014 2015 2016
32 34
44 43
54
2012 2013 2014 2015 2016
AUA (£bn)
14% CAGR
1,019
2,812
5,987
2,417 3,685 1,320
1,277
591
327
3,3231
2012 2013 2014 2015 2016
Retail Corporate
1. Retail 2016 £3,323m includes £378m of individual annuities in addition to Aegon’s individual back book transaction (£2,945m)
2. Lucida acquisition (2013) included in Corporate PRT
2
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
88.7 102.9 106.8
134.8
2013 2014 2015 2016
LGIM: Well positioned for continued growth
Solutions AUM (£bn) Index AUM (£bn)
1. Global fixed income
2. Comprises Property and Infrastructure AUM
Real Assets AUM2 (£bn)
• Maintaining strong position in UK DB and DC as pension schemes seek a broader range of solutions
• Continuing to diversify the business through the growth in Solutions, Active Fixed Income and Real Assets
• Growth in Active Fixed Income (AFI) driven by UK and US institutional clients
• Well positioned in Index, with strong inflows from international and retail clients as the business expands its
distribution strategy
• Strengthening private credit capabilities and increasing Real Assets AUM
37
232.5
293.3 338.2
411.9
2013 2014 2015 2016
269.8 274.8 274.3
319.8
2013 2014 2015 2016
12.0 14.5
18.3 19.6
2013 2014 2015 2016
AFI AUM1 (£bn)
21% CAGR 15% CAGR 6% CAGR 18% CAGR
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
Time
Buy-out
DGFs
LDI
Real Assets
Buy and
Maintain
Credit
c.£2.1trn
buy-out
liabilities
Multi-Strat
Credit
Smart
Beta
DGFs
Funding
level
Average buy-
out funding
level
63%
Source: The Pensions Regulator’s Purple Book 2016 Data as at 31 March 2016. IPE Research. 2016 KPMG LDI Survey. Insurance statistics as at August 2016.
Equities
Credit
Gilts
UK DB PENSION SOLUTIONS JOURNEY
OUTCOME ORIENTATED
SELF
SUFFICIENCY
MARKET BENCHMARK
INSURANCE
LDI
• Largest UK DB pension manager with 32% market share. Largest UK LDI manager with 45% of market
• Core DB business continues to evolve, with strong growth in active and pooled LDI and increasing momentum
in fiduciary management strategies
• Continue to build a broader range of capabilities, with a focus on liability aware investing, diversified growth
strategies and real assets
LGIM: Core strength in UK Defined Benefit pensions
38 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
28
34
41 46
57
6 8 11
15
21
2012 2013 2014 2015 2016
DC Assets DC AUA
DC AUM and AUA growth (£bn) DC client growth Retail AUM (£bn)
Market leading capabilities for UK DC clients:
• Strong growth in DC assets, up 24% to £57.1bn
• Number of pension schemes serviced has more than
doubled to over 9,400
• Building presence in SME market following investment
in Smart Pension, an auto-enrolment platform
• Leadership in product development (Multi- Asset Funds,
Pathway Funds, Future World Fund)
Accelerating growth in our Retail business:
• Robust performance in a challenging market, with
positive net flows every month and net new
business of £1.4bn (2015: £1.2bn)
• AUM increased to £24.1bn
• Continue to build our offering in Index, Multi-Asset
and Active Specialties with increased focus on
sales through wealth managers
39
LGIM: Continued growth in DC pensions and Retail business
DC AUM
19% CAGR
13
17 18 20
24
2012 2013 2014 2015 2016
2012 2013 2014 2015 2016
17% CAGR
2,153
9,493
473
2,241
2012 2013 2014 2015 2016
DC schemes DC customers (' 000s)
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
46
252
-100-80-60-40-20020406080100120140160180200220240260280
0
50
100
150
200
250
2012 2013 2014 2015 2016
Other International Assets US Assets US Clients
• Total international AUM of £177.4bn, a 45% increase (2015: £122.4bn)
• Strong net international inflows of £14.5bn (2015: £9.5bn)
• Significant growth in the US business, with net flows of £9.4bn (2015: £6.3bn). Growing demand for Index and continued strength in Solutions and Fixed Income
• Expanding into US DC market and developing US Real Assets capability
• Higher net flows across Europe (£2.6bn), the Gulf (£1.6bn) and Asia (£0.8bn)
• Expanding range of SICAV and ICAV products for international markets
• Developing trading and fund management capabilities in Hong Kong
• Opened office in Tokyo
International AUM Growth (£bn)
£43bn
£177bn
International Net Flows (£bn)
2012 2013 2014 2015 2016
Other International Flows US Flows
£8bn
£14.5bn
40
LGIM: Successfully expanding internationally across all regions
43% CAGR
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
LGC: Maximising value for the Group
What we do How we achieve this
Maximise risk
adjusted returns
• Invest L&G’s £6.2bn shareholder funds
• Grow shareholders’ returns through strategic investment in Direct Investments which are
forecast to double to over £2bn over 3 years
• Deliver robust portfolio IRR from Direct Investments of 10-12% over the long-term
Create new
asset classes and
business models
• Focus on three Direct Investment sectors where there is a “£ multi-billion” funding gap:
Housing, Infrastructure and SME Finance
• Collaborate with strong commercial partners and bring our financial expertise and proven
ability to scale and grow businesses
• Create investment vehicles to re-connect long-term investors to our key sectors
Provide investment
opportunities for
the Group
• Create asset pipeline which will be sold internally or externally
• Create new long-term asset management opportunities
• Create business platforms which may be scaled-up by the Group
Acquire Develop Sell
Internal
External
41
Retirement LGIM Capital LGI GI Savings
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
LGC: Opportunity to grow in all sectors
Sector Macro theme Scaling up
businesses
Developing new
businesses
Housing • UK builds around half of the target 300,000 new
homes p.a.
• New forms of capital and technology required to
supplement existing industry
• ‘Generation Rent’, 5.7m private renters by 2018
• 3.3m “senior” buyers, with £820bn of equity seeking
aspirational “downsizer” homes
• CALA Homes
• Build-to-rent
• Build-to-sell
• Strategic land
bank
• Manufactured
house building
• Affordable
housing
• Senior living
Infrastructure
• UK National Infrastructure Pipeline: projects worth
£290bn of investment to 2020-21, 50% to be private
sector funding
• UK Urban Regeneration funding need of £100bn
• £40bn clean energy market becoming “subsidy-free”
and consolidating
• Urban
regeneration
projects (10
projects)
• Clean energy
aggregation
platforms
• Further urban
locations
• Transportation
Hubs
• Energy asset
technology
innovation
SME Finance
• £150bn UK SME debt financing market with £60bn
of new lending per year
• £5bn support from UK Government to grow UK
SMEs
• £1bn funding gap for UK SMEs
• SME Senior
Secured loans
• SME equity
(growth and
venture)
• Trade receivables
42 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
LGI UK: Growth in premiums and operating profit
43
FINANCIAL HIGHLIGHTS 2016 2015
Release from operations (£m) 185 244
New business surplus (£m) 23 25
Net release from operations (£m) 208 269
Operating profit (£m) 216 204
Gross written premium (£m) 1,512 1,442
Mortgages facilitated (£bn) 53 46
Surveys completed (k) 523 482
Solvency II margin (%) 10.4
• UK Protection gross premium up 5% in 2016,
driven by strong new business sales from our
market leading retail protection business and
existing business retention
• Operating profit growth despite adverse
experience in Group Protection, as a result of
strong expense discipline and continued strong
Retail Protection performance
• Group Protection claims experience driven by
increased average claims costs on life
assurance and income protection products.
2016 claims experience £(43)m (2015: £(20)m).
Actions are being taken
• UK Protection SII new business margin of
10.4% reflects lower capital requirements under
Solvency II compared to Solvency I
• Continued strong performance of the
Mortgage club and Surveying businesses
LGI UK includes UK Retail and Group protection, UK Surveying and the Mortgage Club businesses
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
LGI US: Increased release from operations and premiums
44
FINANCIAL HIGHLIGHTS 2016 2015
Net release from operations ($m) 91 83
Operating profit ($m) 115 125
Gross written premium ($m) 1,220 1,183
Solvency II margin (%) 12.4
• Net release from operations up 10% to $91m
• US Protection premiums up 3% to $1,220m
benefitting from strong relationships with
brokerage general agents (BGA)
• Operating profit down 8% to $115m, driven by
adverse mortality claims experience
• 4th largest provider of term life through BGA
distribution channel
• 10th largest provider of term life by APE in
the US
• 1.2m customers
• $100m dividend paid in February 2017
(2016: $88m) $63m
$69m $76m
$83m $91m
$100m
2012 2013 2014 2015 2016 2017
LGI US dividend ($m)
10% CAGR
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Retirement LGIM Capital LGI GI Savings
Sensitivity analysis: Solvency II coverage ratio
45 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Who New Position Background
Sir John Kingman Chairman Former Second Permanent Secretary, HM Treasury; former CEO, UKFI; former co- head of
global FIG, Rothschild
Philip Broadley NED, Audit Committee Chair Group Finance Director at Old Mutual plc and the Group Finance Director of Prudential plc
Toby Strauss NED, Risk Committee Chair Group Director of Insurance & Chief Executive of Scottish Widows at Lloyds Banking Group
Lesley Knox NED, Remuneration Committee Chair Senior roles in financial services, including Kleinwort Benson and Bank of Scotland
Kerrigan Procter Group Executive Director CEO of LGR since January 2013, the Company’s largest division by operating profit
Bernie Hickman CEO LGI MD Individual Retirement
Aaron Meder CEO LGIM America Head of Investment, LGIM
Cheryl Agius CEO General Insurance Head of the UK Strategic Pension Risk Transfer Team, LGR
Chris Knight MD, LGR Retail Customers CFO of Legal & General Retirement
Anton Eser Chief Investment Officer Co-Head of LGIM’s Global Fixed Income business
Jeff Davies Group Chief Financial Officer Senior partner of E&Y - led the European Risk and Actuarial Insurance Services practice
Helena Morrissey Head of Personal Investing Chief executive of Newton Investment Management for 15 years
Garvan O’Neill Group Director of Finance PwC Ireland Head of the Financial Services Regulatory Practice. PwC partner for 15 years
Stephen Halliwell CFO LGC CFO at 3i Infrastructure plc
Paul Miller Group Strategy and M&A Director Head of EMEA Insurance, within the investment banking division, Goldman Sachs International
Strengthening our board and management team
46 LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW | MARCH 2017
Creating possibilities for a more secure future
LEGAL & GENERAL GROUP PLC | DEBT ROADSHOW – MARCH 2017