Legal & General Group PLC (LON:LGEN) shares gained on Wednesday as the insurer has reported an above-forecast 32% jump in 2017 operating profit, helped by reserve releases related to changing longevity expectations.
The FTSE 100-listed firm reported full-year operating profit of £2.1bn, above the consensus forecast of £1.9bn, boosted by a mortality release of £332mln.
The group said its net release from continuing operations - or net cash generated - rose by 9% to £1.35bn.
Legal & General Investment Management, one of the largest investors in the UK stock market, saw its assets under management increase by 10% to £983bn.
Nigel Wilson, L&G’s group chief executive, said: “We remain confident that our unique business model, strong management team, collaborative culture, and strategic focus can deliver further growth in 2018 and beyond."
L&G said it would pay a total dividend of 15.35p per share, up 7% on last year.
In late morning trading, L&G shares were 1.1% higher at 260.6p.
Steve Clayton, manager of the HL Select UK Income Shares fund, which has a 4% weighting in Legal & General commented: “These numbers look solid all round, with underlying earnings growth of 9% and excellent capital generation that has seen a significant improvement in L&G’s already strong finances.”
He added: “The overall picture encourages, L&G has positioned itself to fill some of the gaps that are emerging in financial services markets as the pattern of savings and protection needs swings away from the state.”
-- Adds share price, fund manager comment --