Legal & General Group Plc · LSE:LGEN
Legal & General — Barclays Conference 2014
24 slides from Legal & General's conference presentation, Sep 9, 2014
Slide 1: Legal & General – Barclays Conference
LEGAL & GENERAL. 1 9 September 2014 Barclays Conference EVERY DAY MATTERS.
Slide 2: Forward Looking Statements
2 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 uncerta
Slide 3: Legal and General Group Plc
3 LEGAL AND GENERAL GROUP PLC. WHO ARE WE We’re one of the world’s largest insurance and investment management groups, with assets under management of £465bn (c.$795bn) at 30 June 2014. Established in London in 1836, we have been providing insurance for our customers for over 178 years. With more th
Slide 4: Our Businesses
4 OUR BUSINESSES. Legal & General Assurance Society Legal & General Retirement (LGR): (LGAS): With around 1m customers, our retail With over 6m individual customers and business helps turn customers pension 2m group customers our three main savings into lifelong retirement income areas are corporate
Slide 5: Strategic & Financial Evolution
5 STRATEGIC & FINANCIAL EVOLUTION. 2009 AND ONGOING 2012 2013 AND BEYOND CASH: CERTAINTY AND CASH + ORGANIC GROWTH + CASH + ORGANIC GROWTH SUSTAINABILITY SELECTIVE ACQUISITONS • Identification of five key macro • Continue to accelerate growth in • Industrialised and automated drivers of growth flow
Slide 6: Clear and Focused Strategy
6 CLEAR AND FOCUSED STRATEGY. GROWTH DRIVERS GROUP RESPONSE 2014 ACHIEVEMENTS TO DATE • Total LGR premiums up 147% to £3.5bn following AGEING RETIREMENT PROGRESS the largest ever UK bulk annuity transaction POPULATIONS SOLUTIONS • Workplace assets up 9% to £9.5bn DIGITAL DIGITAL • GI Direct: Market
Slide 7: Five Successful Profit Centres
7 FIVE SUCCESSFUL PROFIT CENTRES. INVESTMENT LEGAL & GENERAL PROTECTION AND LEGAL & GENERAL LEGAL & GENERAL MANAGEMENT RETIREMENT (LGR) SAVINGS (LGAS) CAPITAL (LGC) AMERICA (LGA) (LGIM) KERRIGAN PROCTER, MD MARK ZINKULA, CEO JOHN POLLOCK, CEO PAUL STANWORTH, MD JIMMY ATKINS, CEO The leading UK de- L
Slide 8: Working Together
8 WORKING TOGETHER…. Legal & General's five divisions work seamlessly together to provide unique expertise and innovative financial solutions to our customers. • Our LGIM and LGAS corporate businesses use their combined strength to build our defined contribution (DC) footprint • LGIM and LGR are for
Slide 9: Consistent Delivery: Strong Results
9 CONSISTENT DELIVERY: STRONG RESULTS. £m H1 2014 H1 2013 Growth Annuity Assets (£bn) 38.5 32.2 20% LGIM Assets (£bn) 654 579 13% GROWTH LGAS Savings Assets (£bn) 118 100 17% UK Protection and GI gross premiums (£m) 921 875 5% LGA gross premiums ($m) 553 503 10% Operational cash generation (£m) 578
Slide 10: Interim Dividend Up 21% to 2.90p
10 INTERIM DIVIDEND UP 21% TO 2.90p. 9.30p Final 7.65p Interim 6.40p 6.90p 4.75p 5.69p 3.84p 4.74p 3.42p +21% 2.73p 2.40p 2.90p 1.66p 1.96p 1.11p 1.33p 2009 2010 2011 2012 2013 H1 2014 Dividend 3.11 2.72 2.26 1.91 1.82 n/a coverage1 DIVIDEND GUIDANCE: Assuming we continue to anticipate a Solvency II
Slide 11: Five Macro Trends
FIVE MACRO TRENDS. Our 2014 report shows the need for protection, with the average household having a ‘Deadline to the Breadline’ of just 26 days.
Slide 12: Ageing Populations: Global Pensions Market
12 AGEING POPULATIONS:GLOBAL PENSIONS MARKET. DEFINED BENEFIT PENSION ASSETS1 DEFINED CONTRIBUTION2 • Global de-risking at an early stage of a • UK defined contribution market structural de-risking trend anticipated to have around 12 million • $9.3 trillion of private DB assets in the UK, auto-enrol
Slide 13: LGR and LGIM De-risking Capability
13 LGR AND LGIM DE-RISKING CAPABILITY. Legal & General in US Legal & General Retirement LDI & Active Longevity Passive multi-asset Buy-in Buy-out funds Fixed insurance Legal & General Investment Management Index funds Solutions1 Active fixed Longevity Buy-in Buy-out interest insurance Assets 268.7 2
Slide 14: UK Regulatory Environment
14 UK REGULATORY ENVIRONMENT. “NO ONE WILL HAVE TO BUY AN ANNUITY” George Osborne, 19th March 2014 The Chancellor aimed to increase customer choice, encourage competition and innovation in the annuity market. We welcome this and believe we will be a beneficiary from the changes AUTO-ENROLMENT UK emp
Slide 15: Ideally Placed to Provide Retirement Choices
15 IDEALLY PLACED TO PROVIDE RETIREMENT CHOICES. Customer Viability of products needs: being assessed: In retirement asset / income management Simple income Manage drawdown income / growth Income and lifetime guarantees Access to other sources of wealth Lifetime mortgages Secure income for Underwrit
Slide 16: Digital Solutions
16 DIGITAL SOLUTIONS. Platform Size Q3 2013 AUA £bn² FORECAST PLATFORM GROWTH TO 2018 1,400 1,200 1,000 800 £bn 600 400 200 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Realistic Pessimistic Optimistic ‒ The forecast for platform fund growth is exciting as people take great res
Slide 17: UK Welfare Reform
1 17 7 UK WELFARE REFORM. ‒ UK Budget deficit and ageing population with rising healthcare costs means we need to look at alternative ways of looking at welfare reform. The UK Government spent £179bn more than it received in tax in the last financial year ‒ UK State pension could cost over £400bn p.
Slide 18: Homogeneous Asset Markets
18 HOMOGENEOUS ASSET MARKETS. LGIM INTERNATIONAL ASSETS • Strong growth in the US continues with net flows of £4.7bn in H1 2014 £83bn • Integration of GIA following the acquisition in May £23bn • Developing plans to enter the US Index 2009 2010 2011 2012 2013 H1 2014 market US Non US GIA • Won our f
Slide 19: Retrenchment of Banks: Slow Money Powerhouse
19 RETRENCHMENT OF BANKS: SLOW MONEY POWERHOUSE. Institutional investment can help reverse the consistent decline in UK investment 24 Student Accommodation over 22 £1bn, maturities to 50 years 20 Affordable Housing % of GDP 18 £500m, maturities to 50 years 16 Hospitals, Care Homes 14 Over £210m, mat
Slide 20: Our Interim Results
OUR INTERIM RESULTS. FIVE MACRO TRENDS, FIVE WINNING STRATEGIES.
Slide 21: Interim Results Summary: Financial Highlights
21 INTERIM RESULTS SUMMARY: FINANCIAL HIGHLIGHTS. 1. Annuity assets up 20% to £38.5bn (H1 2013: £32.2bn), LGIM assets up 13% to £654bn (H1 2013: £579bn) and Savings assets up 17% to £118bn (H1 2013: £100bn) 2. Net cash up 13% to £567m (H1 2013: £500m); Operational cash up 8% to £578m (H1 2013: £537m
Slide 22: Next Steps
22 NEXT STEPS. GROUP RESPONSE PROGRESS IMPLEMENTED SO FAR NEXT STEPSPROGRESS • Acquired Lucida for £149m in 2013 • Evaluate opportunities in US and Canada RETIREMENT • Expect return of c£140m capital by end 2014 • Monitor UK market for opportunities SOLUTIONS • Fully integrated on L&G systems – no f
Slide 23: L&G: Financially Successful, Socially and Economically Useful
23 L&G: FINANCIALLY SUCCESSFUL, SOCIALLY AND ECONOMICALLY USEFUL, WITH A STRONG FUTURE. • LGR: Opportunities for growth have increased • LGAS: Substantial digital progress coupled with improving internal cost efficiency • LGIM: Transformation to international fund manager accelerating • LGC: Success
Slide 24: Every Day Matters
24 EVERY DAY MATTERS. We have a powerful purpose. Every day, we promise to make financial security easier to achieve for our customers. We help people build better and more secure lives. In this way we demonstrate that we are economically and socially useful. We know our customers benefit from our d