Legal & General Group Plc · LSE:LGEN
Legal & General — Investor Day (December 2016)
94 slides from Legal & General's investor day presentation, December 2016
Slide 1: Legal & General Group plc Capital Markets Event December 2016
Legal & General Group plc Capital Markets Event December 2016
Slide 2: Forward looking statements
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
Slide 3: Introduction
—s = ie ' 2 Introduction a6 Nigel Wilson ig @ ‘ii ha aI os
Slide 4: Capital markets event objectives
Capital markets event objectives Ambition: to repeat operating performance achieved in 2010-2015 in 2015-2020
Slide 5: Agenda
Agenda 15.00 – 15.10 15.10 – 15.25 15.25 – 15.40 15.40 – 15.55 15.55 – 16.05 16.25 – 16.45 16.45 – 17.00 17.00 – 17.20 17.20 – 17.25 17.25 – 17.45
Slide 6: Our vision and equity narrative
Our vision and equity narrative • • • • •
Slide 7: We are a focused, high performing business
We are a focused, high performing business H1 2016 OPERATING PROFIT DIVISIONS ALLOCATION1 MARKET PERFORMANCE £m % • ASSET GATHERING DIVISIONS LGR 406 43 • • • LGIM 171 18 • • LGC 135 15 Total 712 76 TRADITIONAL DIVISIONS • LGI 150 16 • • General Insurance 31 3 • Savings 49 5 • Total 230 24 Group 942
Slide 8: Focused business aligned to long term structural growth drivers
We are a focused, high performing business aligned to key long term structural growth drivers GROWTH DRIVERS OUR CAPABILITIES CONTINUED PROGRESS GLOBAL RETIREMENT LGR ASSETS INCREASED FROM £28BN in 2011 TO DEMOGRAPHICS SOLUTIONS £51BN IN H1 2016 GLOBALISATION OF INTERNATIONALLY LGIM AUM GROWN FROM £
Slide 9: Key financials: strong growth, attractive returns
Key financials: strong growth, attractive returns • Our ambition is to repeat a similar operating performance in 2015-2020 • Current FY forecasts has net cash generation at c£1.4bn 2011 2012 2013 2014 2015 2016 H1 2015 H1 2016 Consensus* NET CASH GENERATION (£m) 846 865 1,002 1,104 1,256 1,335 629 7
Slide 10: De-cluttering our business has increased focus
De-cluttering our business has increased focus
Slide 11: Focused on high returns from a position of strength
Focused on high returns from a position of strength STRONG GROWTH OPPORTUNITY IN EACH DIVISION UNDERPINNED BY: Balance Sheet Strength Growth Opportunities Strong Shareholder Returns
Slide 12: Balance Sheet
Balance Sheet Mark Gregory & Garvan O’Neill
Slide 13: Balance Sheet: What we will cover today
Balance Sheet: What we will cover today Solvency II Robust balance Liquidity sheets • Our thinking • H1 2016 experience • Key considerations • Emergence of surplus • downgrade sensitivity • Ability to support growth and dividends
Slide 14: Strong Solvency II capital position
Strong Solvency II capital position CAPITAL POSITION CAPITAL POSITION • COVERAGE 230% 235% 169% 158% 175% 163% RATIO OWN £13.5bn £14.0bn £13.5bn £14.3bn £12.9bn £13.7bn FUNDS £14bn £8.1bn £5.3bn £7.6bn £5.5bn £5.3bn £12bn £5.5bn • £10bn • £8bn £9.0bn £8.0bn £8.4bn £7.4bn £6bn £5.9bn £5.9bn £4bn £2bn
Slide 15: Solvency II: New business growth and dividends well covered
Solvency II: New business growth and dividends well covered 2016 F Comments £bn Expected Operating Surplus 1.25 • – Existing Business Operating Surplus • (0.15) – New business • Net Surplus 1.10 Dividends paid (0.83) • Market Movements Other Movements Total Surplus over year
Slide 16: Annuities: investment quickly recouped, limited new business strain
Annuities: investment quickly recouped, limited new business strain FY FORECAST 2016 NEW BUSINESS – ANNUITIES CAPITAL POSITION Payback period £120m 4years £80m £40m £0m 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 -£40m -£80m H1 2016
Slide 17: New UK Protection business creates a day 1 Solvency II surplus
New UK Protection business creates a day 1 Solvency II surplus FY FORECAST 2016 NEW BUSINESS – UK PROTECTION OTHER BUSINESSES BUSINESS SOLVENCY II APPROACH LGA LGIM LGC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Slide 18: Group diversification further enhances capital efficiency
Group diversification further enhances capital efficiency FY FORECAST 2016 NEW BUSINESS – TOTAL GROUP CAPITAL POSITION £120m Payback period 3 years £80m £40m £0m 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 -£40m -£80m -£120m -£160m • •
Slide 19: Beyond 2016: new business growth and progressive dividend policy
Beyond 2016: delivering new business growth and progressive dividend policy in a Solvency II world In-force insurance business: substantial, long term, surplus releases New business: investment quickly recouped, limited strain LGIM and LGC: growing contribution as asset base increases Target to de
Slide 20: Strong Solvency II and IFRS balance sheet
Strong Solvency II and IFRS balance sheet FY 2015 £bn H1 2016 £bn • IFRS • Net Equity 6.4 6.6 • • SOLVENCY II Surplus* 5.5 5.3 • H1 2016 SOLVENCY II CAPITAL* £bn Core Tier 1 (Equity) 11.0 • Other Tier 1 (Debt) 0.6 • Tier 2 (Debt) 2.2 • Deductions (0.1) Eligible Own Funds 13.7 Capital requirement 8.4
Slide 21: Debt profile
Debt profile HYBRID DEBT REDEMPTION PROFILE1 2016 2017 2018 2019 2020 2021 2025 2031 2032 2033 2044 MOODY’S ADJUSTED LEVERAGE RATIO BELOW 30% IN LONG TERM
Slide 22: H1 2016 experience and management actions
H1 2016 experience and management actions 2016 ECONOMIC INDICATORS YTD Barclays Sterling Corporate 10 to 15 Avg OAS 300% Swap Curve Levels 2.4 1.9 200% 1.4 100% YTD USD vs GBP FX Moves 5.0% 0.0% 0% -5.0% 2 15 -10.0% -15.0% -20.0% • YTD FTSE 100 Total Returns • 20% • 10% 0% • -10% -20%
Slide 23: Balance sheet sensitivity scenario: downgrade event
Balance sheet sensitivity scenario: downgrade event Sector H1 2016 Group Exposure (£bn) Total • BB or AAA AA A BBB Other £bn % below Sovereigns 1.5 8.1 0.2 0.4 0.1 - 10.4 19 Banks 0.5 0.9 1.5 0.4 - - 3.3 6 Other Financial Services/Insurance 0.1 1.2 2.4 0.7 0.2 - 4.5 8 • Utilities 0.1 0.1 4.2 3.1
Slide 24: Monitoring liquidity in the Group
Monitoring liquidity in the Group 4 CONSIDERATIONS Current position “Keeping it topped up” Hygiene FREE INTERNAL CASH SII SURPLUS IFRS LIQUIDITY GENERATION FOR EMERGING - NEAR CASH DIVIDEND CASH • • • • • •
Slide 25: Risk Management
Risk Management Simon Gadd & Anton Eser
Slide 26: Risk Management: What we will cover today
Risk Management: What we will cover today Group Risk Risk profile Managing Risk Annuity Investment Current function Portfolio philosophy portfolio management and process • Role and • Risk types • ALM risks • Global Fixed • Long term • Split by sector, Income themes credit rating and responsibilities
Slide 27: Role of Risk Management
Role of Risk Management Group CRO Market Risk Credit Risk Insurance Risk Operational Risk Conduct Risk Strategic Risk Emerging Risk • • • • • • • LGR LGI LGC LGIM Savings
Slide 28: Risk Profile
Risk Profile RISK TYPES CATEGORIES APPETITE DIVISION SCR RISK EXPOSURE Equity, spread and property MARKET Interest rates and inflation Currency 3 Bond default Property lending counterparties CREDIT Banks & financial instruments Reinsurance counterparties Longevity, mortality & morbidity INSURANCE Li
Slide 29: Market risk
• • • • • • Market risk 0 1,000 2,000 3,000 4,000 -3,000 -1,000 -2,000 • • 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 CASHFLOW MATCHING 2051 2052 2053 2054 2055 2056 2057 20
Slide 30: Longevity, mortality and morbidity
Longevity, mortality and morbidity • • • • • • PRODUCT 2015 CLAIMS UK Workplace Protection • US Term Assurance Retail protection - Life Retail protection - Critical Illness Retail protection - Terminal Illness
Slide 31: Continuing to monitor the environment
Continuing to monitor the environment • • • • • • •
Slide 32: Annuity Portfolio Management
Annuity Portfolio Management Draws on resources across Public and Private credit Global fixed income AUM £125bn Global Fixed Income • Private Real Credit Estate • Other • Euro credit Sterling • credit Real Assets US • Credit • • •
Slide 33: Annuity Portfolio Management
Annuity Portfolio Management Ensure stable through-the-cycle returns Global fixed income AUM £125bn • • • • • •
Slide 34: Investment philosophy and process
Investment philosophy and process Bottom-up credit Global fixed income AUM £125bn Long term themes research Macro-thematic investment process provides guidance for top-down positioning and bottom-up stock selection Long-term strategic themes Risk allocated by sector and region Fundamental credit ana
Slide 35: Current portfolio
Current portfolio HIGHLY DIVERSIFIED PUBLIC AND PRIVATE CREDIT PORTFOLIOS* SECTOR PUBLIC PRIVATE TOTAL TOTAL £m £m £m % Sovereigns, Supras and Sub-Sovereigns 8,765 8,765 17.2 1 Banks - Senior 2,064 2,064 4.1 - Subordinated 445 445 0.9 2 By Financial Services 3,301 3,301 6.5 Credit Insurance 988 988
Slide 36: OSA
OSA
Slide 37: Legal & General Insurance
Legal & General Insurance Bernie Hickman & John Hyde
Slide 38: Legal & General Insurance: What we will cover today
Legal & General Insurance: What we will cover today Overview Key financials Digital Shared Summary innovation expertise • Internationalising • Cash and profits • Retail Protection • Acceleration of • Delivering growth LGI by leveraging rebased competitive growth in the US UK expertise to the • Capit
Slide 39: Internationalising LGI by leveraging UK expertise to the US & beyond
Internationalising LGI by leveraging UK expertise to the US & beyond HY 16 OPERATING PROFIT CONTRIBUTION1 UK & US PROTECTION GROSS PREMIUM Combined MARKET SHARE across UK RP, UK GP and US total term converting all markets to $ OVERVIEW OF LEGAL & GENERAL INSURANCE CUSTOMER MARKETS • • • • • • • • •
Slide 40: Cash and profits rebased; important capital contribution from Retail Protection
Cash and profits rebased; Important capital contribution from Retail Protection FINANCIAL HIGHLIGHTS H1 H1 FY • 2016 2015 2015 UK PROTECTION 2016 F • OPERATING PROFIT • •
Slide 41: Digital innovation has created Retail Protection competitive advantages
Digital innovation has created Retail Protection competitive advantages STRONG & DIVERSE DISTRIBUTION* • • • EXCELLENT POINT OF SALE DECISION RATES • 100% 80% +21% 60% 40% 80% 59% 20% 0% 2010 2016
Slide 42: Low cost, scalable business model
Low cost, scalable business model REDUCING REINSURANCE PREMIUMS REFLECTING RISK MANAGEMENT EXCELLENCE • LOW IN-FORCE UNIT COSTS (£) • 10 8 6 10.2 • 4 8.9 8.2 8.5 8.1 6.4 5.9 2 0 2010 2011 2012 2013 2014 2015 H1 2016
Slide 43: Our shared expertise will accelerate growth in the US
Our shared expertise will accelerate growth in the US LEGAL & GENERAL BUSINESSES ARE WELL SIGNIFICANT OPPORTUNITY FOR MARKET ESTABLISHED AND INTEGRATED GROWTH US INDIVIDUAL TERM MARKET* Legal & General LGR LGIM America America APE $2,236m Legal & General America Rest of Market LEGAL & GENERAL AMERIC
Slide 44: Delivering growth through a diverse, digital and global insurance division
Delivering growth through a diverse, digital and global insurance division UK RETAIL PROTECTION UK GROUP PROTECTION LEAD & LEVERAGE REFOCUS & REBUILD DIGITISATION & DISTRIBUTION EXPERTISE US PROTECTION UK, US & BEYOND DIGITISE & DIVERSIFY
Slide 45: General Insurance: New distribution agreements to deliver premiums growth
General Insurance: New distribution agreements to deliver premiums growth FINANCIAL HIGHLIGHTS H1 2016 H1 2015 FY 2015 • Global fixed income AUM £125bn • • • • GROSS WRITTEN PREMIUMS
Slide 46: Legal & General Group plc Capital Markets Event December 2016
Legal & General Group plc Capital Markets Event December 2016
Slide 47: Our unique investment business model: capturing maximum value
Our unique investment business model: capturing maximum value LGIM £842BN Delivering economically and socially valuable solutions to benefit customers, investors and society • Early stage investment • Development • Asset creation LGIM LGR LGC • Ownership • Management LGR LGC £51BN £6BN The illiquidi
Slide 48: Legal & General Investment Management
Legal & General Investment Management Mark Zinkula & Aaron Meder
Slide 49: LGIM: What we will cover today
Legal & General Investment Management: What we will cover today What we The growth Diversifying Core strength Opportunities Our global deliver opportunity our approach in UK DB in DC and expansion retail • Consistent • Well placed for • Strong client- • Largest UK DB • 15% DC market • Expanding stro
Slide 50: Consistent strong financial results
Consistent strong financial results REVENUE GROWTH WITH A STEADY MARGIN • 800 100% Revenue & Expenses Revenue 600 growth 13% 80% • C/I Ratio 60% (£m) 400 40% 200 20% • 0 0% 2010 2011 2012 2013 2014 2015 • FINANCIAL HIGHLIGHTS H1 2016 FY 2015 FY 2010 CAGR % Operating profit (£m)* 171 355 206 11% • To
Slide 51: Outperforming our peers
Outperforming our peers AUM TREND REVENUE TREND 300 300 250 250 200 200 150 150 100 100 50 50 - 0 2007 2008 2014 2015 2007 2008 2014 2015 PROFIT TREND NET FLOWS TREND 8.0% 300 7.0% 250 6.0% 5.0% 200 4.0% 150 3.0% 100 2.0% 1.0% 50 0.0% 0 -1.0% 2007 2008 2014 2015 2007 2008 2014 2015
Slide 52: Well positioned for future growth
Well positioned for future growth STRONG GROWTH AGAINST SLOWING STRUCTURALLY WELL POSITIONED TO GLOBAL AUM CAPTURE FUTURE GROWTH Global AUM LGIM AUM 2% 200 7% 800 Alternatives 9% 180 LGIM 13% 746 700 growth Active 160 694 specialities 600 45% 140 Solutions 23% 21% 120 500 Index 8% Global 1% £bn $tr
Slide 53: Diversifying solutions approach across channels and regions
Diversifying solutions approach across channels and regions 1. CULTURE & CLIENT SERVICE 2. INVESTMENT EXCELLENCE 3. SOLUTIONS APPROACH 55% 88% 46% Diversify by channel (UK Ext AUM £bn) Diversify by region (Global AUM £bn) 25 27 UK (82%) Core 100 US (12%) strength in pensions 690 Gulf & Asia (3%) Eur
Slide 54: 1. Culture & client service: putting our clients first
1. Culture & client service: putting our clients first Strength and Established Consistently depth in our long term high client client teams relationships service scores 120 55% 90% TOP 265 65% QUARTILE TOP 650 90% QUARTILE
Slide 55: 2. Investment excellence: generating strong performance
2. Investment excellence: generating strong performance Percentage of funds outperforming 1 Year 3 Years 5 Years Index Within fund specific tracking target 97% 100% 98% Active Fixed Income Above benchmark 82% 88% 79% Active Equity Above benchmark 40% 89% 89% Property Above benchmark 60% 78% 78% Acti
Slide 56: 3. Solutions approach: investment tailored to our clients' objectives
3. Solutions approach: investment tailored to our clients’ objectives Objective driven investment solutions GROWTH LGIM - £842bn of assets under management* MATCHING Active Fixed L&G Active Income Real buy-in Index Solutions Equity (incl. LGR Assets & annuity assets) longevity insurance £300bn £8bn
Slide 57: Core strength in UK Defined Benefit pensions
Core strength in UK Defined Benefit pensions UK DB PENSION SOLUTIONS JOURNEY Funding Buy-out level c.£2.1trn DGFs buy-out liabilities 62% DGFs Smart Buy and Beta Maintain Equities Infrastructure / Multi-Strat Real Assets Credit Credit LDI LDI with (13% Growth rate Gilts leverage 2015-16) Time MARKET
Slide 58: Continued growth in DC pensions and a repositioned Retail business
Continued growth in DC pensions and a repositioned Retail business DC AUM and AUA growth (£bn) DC client growth Retail AUM (£bn) 60 8000 6944 AUM growth 7000 50 18% 6000 40 5000 30 4000 46 50 3000 2153 20 41 2044 34 28 2000 10 17 473 11 15 1000 6 8 0 0 2012 2013 2014 2015 H1 2012 2013 2014 2015 H1 2
Slide 59: Successfully expanding internationally with growth in all regions
Successfully expanding internationally with growth in all regions US AUM (£bn) and client growth Non US international AUM (£bn) 200 183 175 150 125 100 75 46 50 25 0 2012 2013 2014 2015 H1 2016 Index Fixed Income/Solutions Clients US net flows (£bn) Non US international net flows (£bn) 10 5 8 5 3 4
Slide 60: Key priorities: strategic markets account for over c£19trn of AUM
Key priorities: our strategic markets account for over c£19trn of AUM c£0.3trn c£1.6trn c£1trn c£16trn
Slide 61: Legal & General Capital
Legal & General Capital Paul Stanworth & Laura Mason
Slide 62: Legal & General Capital: What we will cover today
Legal & General Capital: What we will cover today What we do What we The growth The LGC Our future deliver opportunity platform • Our purpose • New asset • Size of the UK • Our team • Multiple sources • Our processes classes Funding gap • Our partners of profit • Sources of profit • Which sectors we
Slide 63: Overview
Overview What we do How we do it • • • • • • • • • • • • Internal Acquire Partner Develop Sell asset External
Slide 64: What we have achieved so far
What we have achieved so far • • • 2013 2014 2015 2016
Slide 65: Balancing cash generation and profit delivery
Balancing cash generation and profit delivery H1 2015 H1 2016 FINANCIAL HIGHLIGHTS Direct Direct YOY GROWTH Traded Treasury TOTAL Traded Treasury TOTAL Investm ents Investm ents (%) 778 3,382 621 4,781 1,064 3,833 1,021 5,918 24% 32 79 4 115 68 59 8 135 17% 3 0 (7) (4) (17) 75 2 60 35 79 (3) 111 51
Slide 66: Scaling up opportunities
Scaling up opportunities LGC ASSET EXPOSURE (%) Strategic investment in direct investments • 17% • 3% 9% £5.9bn* 6% 65% Long term returns • •
Slide 67: UK Real Asset opportunity 'Finance Gap'
UK Real Asset opportunity LONG TERM CAPITAL FUNDING REQUIREMENT Housing £150bn Pension Funds £1.3trn Regeneration £100bn Insurance £900bn Funds Clean Energy £40bn ‘Finance Sovereign £4.8trn Gap’ Transport £90bn Wealth Funds SME Finance £125bn REDUCED CAPACITY Banks Governments
Slide 68: Delivering into global asset shift
Delivering into global asset shift Allocations into Real Assets by Investor Type
Slide 69: Strong business model
Strong business model • • •
Slide 70: Delivered solutions in every sector
Delivered solutions in every sector HOUSING SME FINANCE Idea Delivery Idea Delivery • • • • • • • • INFRASTRUCTURE INFRASTRUCTURE Idea Delivery Idea Delivery • • • • • • • •
Slide 71: Top Direct Investments
Top Direct Investments Year of Book value* Counterparty Sector investment £m
Slide 72: Experienced team, strong corporate governance
Experienced team, strong corporate governance Dedicated Specialist Investors All transactions • LGC Board Approval MD approval LGC CRO Investment team + 3 Energy + 3 Property Group Exec Approval + 4 Asset Management + 6 Housing CEO approval Group CRO + 2 Construction (GCC) + 2 Financial Services Sup
Slide 73: Clear synergies with the L&G Group
Clear synergies with the L&G Group Example: Central Cardiff mixed-use redevelopment scheme Sep LGC 1 2015 LGR 2 3 LGC LGIM 4 LGIM 2017 and beyond 5 LGC LGR LGIM
Slide 74: Creating multiple sources of profit growth
Creating multiple sources of profit growth • • Multi-tenure Housing business Leading Infrastructure Business Top 10 UK Housing Provider Leading investment in 10 UK Cities New Generation Energy business Leading SME Finance business Generate 5% UK clean energy Drive £10bn SME investment
Slide 75: Legal & General Retirement
Legal & General Retirement Kerrigan Procter & Chris Knight
Slide 76: Legal & General Retirement: What we will cover today
Legal & General Retirement: What we will cover today What we do What we The growth The impact of How we have Our global deliver opportunity Solvency II responded to expansion Solvency II • Our history • 8 sources of • Size of the UK • Solvency II new • Longevity • Our global • Reinsurance reinsuranc
Slide 77: Helping customers achieve financial security in retirement
Helping customers achieve financial security in retirement Operating Profit (£m) MARKET LEADING RETIREMENT BUSINESS H1 2016 FY 2015 Legal & General Retirement (LGR) • 406 641 • OUR MARKETS ABOUT LGR COMPETITIVE Share ADVANTAGES GLOBAL • 28%1 PENSION RISK UK BALANCE SHEET TRANSFER • only SCALE TO SEL
Slide 78: Delivering 8 sources of profit and record profit growth
Delivering 8 sources of profit and record profit growth SOURCES OF PROFIT OPERATING PROFIT 32% CAGR FY12-FY15 (1) Back Book • for Cash & Capital £641m** (2) Back Book • Acquisitions £428m £406m £281m £310m (3) UK Capital- • Efficient Front 2012 2013 2014 2015 H1 2016 Book (4) Longevity • Insurance •
Slide 79: UK PRT: a growth opportunity
UK PRT: a growth opportunity SIGNIFICANT DEMAND FOR PRT SOLUTIONS L&G UK PRT MARKET SHARE OF 27% SINCE 2007 £2.1trn UK DB liabilities1, only 5%2 transacted to date 2/3 of large pension plans plan to use PRT in the next 5 years3 >1,000 pension plans overfunded on an s179 basis – prime for PRT4 Total
Slide 80: Financially attractive business
Financially attractive business IFRS NBS SOLVENCY II NBS = LOW TO MID SINGLE DIGIT TYPICAL PRT DEAL Premium minus New Business Old Solvency 1 Longevity Higher quality asset New Capital Best Estimate Surplus model reinsurance portfolio Efficient model EEV VERSUS SOLVENCY MARGIN
Slide 81: Superior longevity science intellectual property
Superior longevity science intellectual property LONGEVITY EXPERTISE ABOUT LGR COMPETITIVE ADVANTAGE DEDICATED TEAM OF • 25 EXPERTS • • Total PRT LONGEVITY DATA Years >30 MARKET LEADING PRT FOR 16.2M PERSON LONGEVITY EXPERTS YEARS # lives 4.7m # person years in last 5 years 16.2m EXTENSIVE LINKS TO
Slide 82: Actively managing our exposure through reinsurance
Actively managing our exposure through reinsurance IN-FORCE LONGEVITY EXPOSURE AS AT H1 2016 SUFFICIENT CAPACITY Asset x2 x1 x2 x1 Immediate Deferred Annuity x3 Annuity longevity longevity x6 • EXTENSIVE AGREEMENTS IN PLACE Longevity Asset
Slide 83: Robust asset portfolio with high sectorial diversification
Robust asset portfolio… …with high sectorial diversification £51BN LGR ASSET PORTFOLIO AS AT H1 2016 SECTORAL ANALYSIS AS AT H1 2016 BB or Other below assets • AAA • AA • BBB By Credit • Rating £51bn LGR asset portfolio A • • • By Domicile • •
Slide 84: Direct Investments delivering enhanced value
Direct Investments delivering enhanced value LEGAL AND GENERAL DIRECT INVESTMENTS DI PORTFOLIO - £8.2bn (AS AT SEPT 2016) CHARACTERISTIC REQUIREMENTS • • • • • •
Slide 85: High quality Direct Investment portfolio
High quality Direct Investment portfolio PORTFOLIO STATISTICS (AS AT SEPT 2016) DI PORTFOLIO (£ MV SEPT 2016 ) * 5%5% AAA 22% AA 38% A BBB 31% Sub IG Asset Counterparty Sector % of Internal Term to Commentary Classification Portfolio Rating Maturity 1 2 3 4 5 6 7 8 9 10
Slide 86: Investing long term money to grow the UK economy
Investing long term money to grow the UK economy • • • • • • • •
Slide 87: Investing long term money to grow the UK economy
Investing long term money to grow the UK economy • • • • • • • •
Slide 88: Lifetime mortgages providing another important source of direct investments
Lifetime mortgages providing another important source of direct investments HUGE GROWTH OPPORTUNITY PRUDENT LENDING CRITERIA • • • • • • •
Slide 89: Replicating our model globally
Replicating our model globally GLOBAL OUR OPERATIONS EXECUTING ON THE OPPORTUNITY OPPORTUNITY LGR AMERICA • USA2 $3.2trn, only 4% transacted to • • date L&G RE Canada, • • Netherlands & • Other European1 • $2trn • •
Slide 90: Conclusion
Conclusion Nigel Wilson
Slide 91: Conclusion
Conclusion 1. Why we are winning 2. Future growth ambition 3. Replication of successful UK model in US
Slide 92: OSA
OSA
Slide 93: Legal & General Group plc Capital Markets Event December 2016
Legal & General Group plc Capital Markets Event December 2016
Slide 94: Appendix 1: Group dividend policy
Appendix 1: Group dividend policy DIVIDEND 13.40p 11.25p 9.30p 7.65p 6.40p 9.95p 8.35p 6.90p 4.74p 5.69p 1.66p 1.96p 2.40p 2.90p 3.45p 4.00p 2011 2012 2013 2014 2015 H1 2016 LEGAL & GENERAL GROUP PLC | HALF-YEAR RESULTS | AUGUST 2016