Legal and General (L&G) has reported a slight increase in profits to £1.09 billion over 2012, up from £1.05 billion in 2011, helped by workplace pensions sales more than doubling in the run-up to auto-enrolment.
Profits within its protection and annuities, savings and investment management division were all up on 2011 levels.
New business in its savings division rose from £1.3 billion to £1.5 billion, which L&G attributed to opportunities presented by pension scheme reorganisation driven by the advent of auto-enrolment. Profits rose 6% from £126 million in 2011 to £133 million in 2012. Within that area of the business, workplace pensions sales more than doubled, from £269 million in 2011 to £614 million in 2012.
L&G said that it had consolidated its position in the building society advice sector during 2012. It acts as the sole savings provider for Nationwide, Yorkshire, Leeds and Principality building societies, which it said provided access to 20 million customers across 1,200 branches.
'We believe the new retail distribution review regime will increase the role of the building society sector in providing effective financial advice to mass market and mass affluent customers and lead to increased flows into passive funds,' it said.
Profits from its protection and annuities business rose from £601 million in 2011 to £640 million. Annuity profits were down slightly however, at £281 million, compared to £287 million in 2011. Bulk annuity sales were also down, at £102 million compared to £146 million in 2011, but individual annutiy sales hit a record level of £132 million.
L&G added that it expected to profit from the Financial Services Authority's review of annuity pricing. 'More customers shopping around for annuities can only benefit customers and annuity providers, like Legal & General, who are price competitive,' it said.
Investment management business delivered a £243 million progfit, up slightly from £234 million in 2011.
Nigel Wilson (pictured), group chief executive, said: ‘The more important growth drivers for us are ageing populations, falling state spending on welfare and new long-term investment opportunities as banks retrench. Our expertise, scale and synergies enable us to provide solutions to these challenges, placing us squarely among the beneficiaries from these structural changes.’