The direct investment portfolio now stands at £8.4 billion, and makes up c16% of the assets within the annuity portfolio. Direct investment delivers attractive risk adjusted returns for customer pensions, shareholders, and creates new jobs and economic growth in the UK.
Kerrigan Procter, Managing Director of Legal & General Retirement, said: “Legal & General plans to invest more funds into Direct Investment. The speed and the amount could both be increased should Solvency II regulation be amended to allow for more favourable capital treatment for infrastructure investment, than under the present rules. This would be in the interest of customers, shareholders and the UK.”
Annuity sales are now at £6.9 billion for the year, with total Legal & General Retirement sales at £7.5 billion. As guided the decrease in the Group’s Solvency II surplus from new business regulatory capital strain is expected to be less than £200m (circa 3% of premiums) for business year to date.
The lifetime mortgage business has now received over £1 billion in applications for 2016, and is on track to complete £600 million in lifetime mortgage sales by the end of the year (£231m, HY 2016). Lifetime mortgages support our direct investment activity, as under Solvency II, they are structured for matching adjustment eligibility.
Legal & General Retirement sales and direct investment figures stated are as at week 50 in 2016. Figures disclosed by the business at the Investor Day on 5 December were for week 48 2016.
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