L&G takes £269m longevity charge

by Gill Montia

Story link: L&G takes £269m longevity charge

Legal & General (L&G) recorded full year operating profit of £912 million for 2007, following a £269 million charge which allowed for an adjustment for the longer life expectancy of its clients. Net profit from ordinary activity fell 56%, to £718 million

Tim Breedon, L&G’s chief executive, said: “We have always expected them to live longer, but it is the rate of improvement which we are changing.”

Turning to the current savings market, Mr Breedon expects 2008 to be a challenging year.

With regard to bonds, he believes that market volatility and the capital gains tax issues surrounding investment bonds may impede growth in the short-term, and he is predicting that the investment bond market could decline by 20% over the next six months.

Mr Breedon is also expecting sales of protection products to decline this year, a result of a slowdown in the UK housing market.

Finally, the group reported that claims from last summer’s floods amounted to around £76 million.