Legal & General Group Plc (LGEN), the U.K.’s fourth-biggest insurer by market value, reported first-quarter revenue that missed analyst estimates as lower sales of savings products in Britain outweighed increased demand from overseas.
Sales were 434 million pounds ($702 million) in the first three months of this year, compared with 433 million pounds in the same period a year earlier, the London-based firm said in a statement today. That missed the 443.5 million-pound estimate of six analysts surveyed by Bloomberg.
Legal & General, the biggest investor in the U.K. stock market, raised its dividend 35 percent in March as growth in its U.S. division and investment-management unit boosted cash flow in the past 12 months. At home, the company is betting aging Britons will buy more savings and annuity products as the government cuts state retirement provisions. Internationally, the insurer is trying to expand Legal & General Investment Management, its money-management business.
“The strength of Legal & General’s diversified model has enabled us to deliver strong sales in risk, increased net inflows to LGIM and another good performance on cash generation this quarter,” Chief Executive Officer Tim Breedon said in the statement today. “Despite the challenging economic backdrop we have strong positions in our chosen markets.”
LGIM’s assets under management rose 3.2 percent to 383 billion pounds over the first three months of the year, boosted by net flows of 2.6 billion pounds.
Sales of savings products in the U.K. dropped 6 percent to 300 million pounds while revenue from the company’s international units climbed 37 percent to 56 million pounds. Sales at Legal & General’s risk business, which includes annuities and income protection, rose 8 percent to 78 million pounds.
The insurer’s net cash generation was little changed in the first quarter at 210 million pounds compared with 209 million pounds a year earlier.
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