L&G savings arm powers sales up 12%

Legal and General has reported a 12% increase in new business in Q1, led by growth for its savings arm.

Worldwide new business APE in Q1 was £433m, up from £388m in Q1 2010, with the savings part of the business reporting a 20% increase to £320m.

Overall, the company also reported 18% growth in net cash generation to £212m and it is on target to deliver its £700m net cash target set in March. Meanwhile, total LGIM assets were up 8% to £356bn, with savings assets up 12% to £65bn.

Although UK new business APE through IFAs was up from £156m to £166m, it was down as a percentage from 44% to 42%, with bancassurance and employee benefit consultants increasing their shares.

Within savings, non profit pensions were up 63% to £78m, with workplace pensions new business more than doubling to £61m.

Savings investments were also up 7% to £176m, with an 8% increase in unit trusts and ISAs new business to £79m and Suffolk Life and uninsured SIPPs up 5% to £21m.

Individual protection saw 18% growth to £33m, the best quarterly sales performance since 2008, driven by strong application volumes and a focus on non mortgage related business.

However, total annuity new business sales were down 42% to £24m, with the company blaming a slow BPA market.

With-profits new business was also down slightly from £37m to £36m.

The company is targeting employers and pensions trustees for further growth in 2011.

Tim Breedon, group chief executive at L&G, said: "Roll out of our workplace savings platform continues with a number of large UK companies deciding to move their pension arrangements to Legal & General.

"Our Retail Distribution Review project is entering its implementation phase with a number of business partners signed up for post-RDR distribution agreements.

"We are very confident about the Group's prospects for 2011 and beyond."