British insurer L&G's half-year profit tops analyst forecasts (updated)

Legal & General

05/08/2026 07:38

Writes through, adding shares and CEO comment, and changes media identifier
By Iain Withers
LONDON, Aug 5 (Reuters) - British insurer Legal & General LGEN.L reported a forecast-topping 7% increase in core operating profit to £918 million ($1.24 billion) on Wednesday, but flagged a dip in deals for its pensions buyout business.
Analysts said L&G's results topped expectations almost across the board, but there were misses on its solvency ratio and in pension buyout volumes in the UK at £2 billion, down from about £3.3 billion the previous year in the face of intensifying competition. 
The company's shares gained 0.5% after dipping in early trading.
L&G CEO Antonio Simoes has pledged to improve performance and boost investor returns by selling non-core units and expanding its capital-light asset management and retail divisions.
Its asset-management arm grew assets to more than £1.2 trillion over the period, while the overall group raised some performance targets. Among them was growth in core operating earnings per share, now expected to exceed 6% to 9% this year. 
Simoes told Reuters the outlook for pension buyouts remained strong despite the dip in first-half business. L&G trimmed its forecast to £50 billion of deals for the wider UK market this year due to some landing in 2027 instead.
     
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The Financial Times reported in May that the insurer was attracting interest from potential buyers after a period of subdued share price performance.
L&G's stock has recently enjoyed a better run and was up 16% this year prior to Wednesday's results, outperforming a 10% gain for the wider FTSE 100 blue-chip index.
"I am 100% focused on executing on what is an organic strategy," Simoes said, reiterating that the company was not considering a sale.
"I'm more in the school of under-promising and over-delivery ... I still think there's a lot to go," Simoes added.
The company's Solvency II cover ratio — a key metric of financial strength — was 201%, slightly below forecasts of 206%.
L&G Chief Financial Officer Andrew Kail said this was mainly down to taking action to hedge higher inflation, and it remained well above a target range of 160% to 190%.
($1 = 0.7429 pounds)

(Reporting by Iain Withers; Editing by David Goodman and Jan Harvey)
((iain.withers@tr.com))