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Legal & General's new chief executive, Antonio Simoes, has promised to take a “fresh perspective” on the insurer and FTSE 100 asset manager, as he delivered his first set of results since taking over in January.
Announcing the group's 2023 results on Wednesday, Simoes said the company had “demonstrated resilience in challenging markets to achieve record new business volumes” in corporate pension deals, UK pensions and US protection products. L&G reported operating profit of £1.7bn, broadly flat on the previous year but below consensus analyst estimates.
A wave of corporate pension deals, in which an insurer takes over a company's plan assets and liabilities, has lifted the pension division, while the retail business has weakened slightly due to a lower contribution from fintech investments amid a tougher market. L&G's balance sheet investment unit has been flat in what it called a “challenging macroeconomic environment for alternative assets.”
“This is the moment to take a new perspective, build on our track record and set a vision for profitable and sustainable growth,” said Simões, who will set out his strategy for the group in June.
The company's Solvency II coverage ratio, which is the amount of regulatory capital it holds as a percentage of the required minimum, was 224 per cent at the end of the year, above consensus estimates of 217 per cent, while dividends were in line with expectations.
The company said it had “significant opportunities available to achieve attractive returns for shareholders by retaining and investing capital within the group” but added that it would weigh these opportunities against the benefits of returning capital to shareholders.
Simoes, who joins the business from Santander, replaces L&G's boss of more than a decade, Sir Nigel Wilson. Investors are anticipating his strategy.
“We believe there is scope for new CEO Antônio Simões to increase the return of capital to shareholders either by raising… [dividend per share] Growth. . . “Or buy back shares,” Berenberg analysts said in a note in January.
