Non-mortgage sales lifts L&G protection business

Legal & General has credited diversification into non mortgage related business for strong individual protection results that boosted its third quarter performance.

However the insurer suffered a notable drop in group risk business from July to September but expects this to be addressed with a recovery in quarter four.

It blamed pressures on employment and salaries in general for new business results of £39m (APE) in the nine months to September, slightly down against the same point last year of £42m.

The third quarter figure of £10m was the lowest since pre-2010 with the previous six quarters consistently hitting £14m or £15m.

The provider explained that "with a strong pipeline, sales are expected to improve during quarter four".

Individual protection volumes grew 11% (APE) to reach £98m (compared to last year's £88m), with each quarter this year outperforming any quarter since 2008.

Total protection gross written premiums reached £915m in Q3, up £20m against the corresponding period last year, which L&G said reflected growth in new business and the good persistency on the in-force book.

Legal & General also noted that its general insurance business benefited from the launch of a direct proposition and continued strong performance in the broker channel, with gross written premiums of £221m, £15m higher than the corresponding period last year.

Overall, the group said worldwide sales of £1,338m in the nine months year-to-date were marginally lower than £1,347 in the same period last year, but it expected to generate close to £1bn in cash this year.

Tim Breedon, group chief executive of Legal & General, said it was a successful quarter in difficult markets.

"Sales are up in protection, savings and international and our annuities business has just announced the market's largest BPA deal at £1.1bn which will be reported in next quarter's numbers.

"Our strong cash generation means we can fund new business growth whilst increasing our balance sheet strength and at the same time supporting a growing dividend.

"We are therefore confident we can continue to grow from a position of strength, capitalising on new opportunities despite volatile markets and challenging economic conditions," he added.