L&G assets boosted by pounds 3.7bn of new money

A record pounds 3.7bn of new money from customers flooded into Legal & General in the first half of 1997, according to figures released with the insurer's results yesterday.

The influx of new money, which was pounds 500m higher than the previous half- year record, helped boost assets under management at L&G to pounds 54.6bn.

Operating profits for the group rose 15 per cent over the period to pounds 155.1m with worldwide new equivalent premium income, which measures new regular premiums plus 10 per cent of single premiums, rising by 16 per cent.

David Prosser, chief executive, said the results demonstrated the strength of L&G's core business and while the performance would be difficult to replicate, he said the second half was progressing well.

UK business led the way in the first six months with equivalent premiums rising 24 per cent and new individual business by 49 per cent.

UK life and pensions operating profit rose to pounds 115.3m from pounds 103.4m previously, while UK general insurance profits increased from pounds 9.7m to pounds 10.1m.

The strength of sterling over the past 12 months, however, helped cut overseas life and pensions profits by pounds 1m to pounds 19m.

Mr Prosser said competition remained tough and attention was focused on driving down expenses. Unit costs at L&G have fallen by 25 per cent since 1993.

Analysts said full-year profit forecasts may have to be cut slightly since the results were a shade below expectations.

The interim dividend is being increased by 14 per cent to 4p, a rise that reflected the benefits of changes made last year to the operation of L&G's long-term fund.

The changes provide a basis for transfers from the insurance fund, described by Mr Prosser as the "flywheel of dividend growth".