Given the strategy that is propelling it forward, it is striking to note that Legal & General’s shares this week reached a high not seen since NatWest tried to acquire the company 14 years ago.
In the intervening period, no one in Britain has made the bancassurance model work. In fact, the regulatory environment and looming capital requirements make it far less likely that banks and insurers will jump into bed together – with Lloyds and Scottish Widows constituting a curious outlier.
At L&G, boss Nigel Wilson has spent his first year at the helm intent on grabbing the initiative back from the banks, not ceding control. By hiking investment in infrastructure, including housebuilding, transport and education, he is hoping to match long-hold assets with better returns for pensioners over the long term.
That means edging out banks, which had been the main source of capital investment before they tripped up badly. In search of mountains of cash to repair crumbling roads and rail, it doesn’t look as though Britain needs to keep resorting to Qatari, Chinese or Norwegian money. Our homegrown sovereign wealth funds have been hiding out in the insurance sector all this time.
L&G has taken a far better turn than NatWest, which shortly after its takeover overtures failed was gobbled up by Royal Bank of Scotland.