L&G reports rocky ride on individual protection sales

Legal & General (L&G) has seen individual protection sales fall by 10% in the first half of 2013 as the group saw overall profits rise 13% in the first half of the year.

The group's interim management report, released to the stock exchange today, said across the group as a whole, profit before tax in the first half of the year was £592m, up 13% on the £523m recorded in the same period last year.

Retail Protection sales were down 10% to £65m, compared to £72m in the first quarter of 2012 as, the company said, policies were brought forward by customers into the last quarter of 2012 to secure better rates ahead of gender neutral pricing.

As a result sales in the first quarter of 2013 were 25% below the same period in 2012. In the second quarter of 2013 sales were up 6% on the same period in 2012 as the market returned to more normal levels.

L&G said: "Throughout, we have continued to be the leading provider in the total market and to Independent Financial Advisers (IFAs).

"We also benefit from being the sole provider of Retail Protection to building society partners covering 87% of the sector, and to the appointed representatives of the Legal & General Network."

The Legal & General Network now facilitates one in seven of all UK mortgages, with a 27% share of the intermediated mortgage market.

L&G added that new business margins of 6.7% reflect lower first quarter sales in Retail Protection and pricing volatility until the market adjusted.

"In Q2, our Retail Protection sales have returned to more normal levels, and we expect the margin in H2 to improve back to long term average levels, although below the exceptional levels of 2012," concluded L&G's report.

Group protection, however, achieved sales growth of 8% to £40m compared to £37m in the first half of 2012.

L&G said: "Group life sales have grown 44% benefiting from large schemes offering death in service benefits to employees when they auto enrol in company pension schemes."

"We have delivered an online quote tool which will support continuing growth in group life alongside further stages of auto enrolment. High levels of quote activity in H1 have provided a strong pipeline for H2."

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