Adjusted profit before tax attributable to equity holders
1,367
1,320
2,488
Tax expense attributable to equity holders
4.04
(214)
(258)
(445)
Profit for the period
3.01
1,153
1,062
2,043
Total tax expense
3.01
287
339
589
Profit before tax
3.01
1,440
1,401
2,632
Profit attributable to equity holders
1,153
1,065
2,050
Earnings per share:
Basic (pence per share)4
2.07
19.28p
17.78p
34.19p
Diluted (pence per share)4
2.07
18.37p
16.96p
32.57p
1. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation. Further details are provided in Note 2.08.
2. Insurance operating profit includes £46m (H1 21: £38m; FY 21: £(52)m) from US Insurance.
3. Group debt costs exclude interest on non-recourse financing.
4. All earnings per share calculations are based on profit attributable to equity holders of the company.
2.02 Release from Ops HY22
Changes in valuation assump- tions
Operating profit/ (loss) after tax
Operating profit/ (loss) before tax
New business surplus/ (strain)
Net release from operations
Release from operations1
Exper- ience variances
Non-cash items
Other2
Tax expense/ (credit)
For the six month period
to 30 June 2022
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
LGRI3
310
156
466
6
-
7
-
479
81
560
LGC
208
-
208
-
-
-
-
208
55
263
LGIM
162
-
162
-
-
-
-
162
38
200
Retail
345
(2)
343
(3)
18
(2)
(77)
279
53
332
- Insurance
219
(8)
211
2
18
(1)
(77)
153
32
185
- Retail Retirement3
126
6
132
(5)
-
(1)
-
126
21
147
Total from divisions
1,025
154
1,179
3
18
5
(77)
1,128
227
1,355
Group debt costs
(87)
-
(87)
-
-
-
-
(87)
(21)
(108)
Group investment projects and expenses
(47)
-
(47)
-
-
-
(34)
(81)
(6)
(87)
Total
891
154
1,045
3
18
5
(111)
960
200
1,160
1. Release from operations within Insurance includes £85m of dividends from US Insurance.
2. Other includes experience variances, changes in valuation assumptions (includes changes to assets allocation) and non-cash items relating to US Insurance.
3. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation. Further details are provided in Note 2.08.
Release from operations for LGRI and the UK protection business within Retail represents the expected IFRS surplus generated in the period from the difference between the prudent assumptions underlying the IFRS liabilities and our best estimate of future experience. For workplace savings within Retail Retirement, the release from operations represents the expected annual management charges generated from the in-force business less expected expenses. The Insurance release from operations also includes dividends remitted from US Insurance and IFRS profit after tax for the Fintech business.
New business surplus/(strain) for LGRI and the UK protection business represents the initial profit or loss from writing new business. This includes the costs associated with acquiring new business and setting up prudent reserves, net of tax. Similarly for workplace savings, this includes the cost of acquiring new business in the year less the annual management charges generated by the assets under administration (AUA), net of tax. The new business surplus and release from operations for LGRI and Retail excludes any capital held in excess of the prudent reserves from the liability calculation.
LGRI and Retail Retirement's new business metrics are presented based on a single target long-term asset portfolio. At certain period ends, depending upon the quantum and timing of pension risk transfer (PRT) volumes, we may have sourced more or less of the high quality assets targeted to support that business. At period end, the profit impact of the difference between actual assets held (including alternative surplus assets where suitable) and the long-term asset mix is reflected in investment variance.
Net release from operations for LGRI and Retail is defined as release from operations plus new business surplus/(strain).
Release from operations and net release from operations for LGC and LGIM represents the operating profit (net of tax).
See Note 2.03 for more detail on experience variances, changes to valuation assumptions and non-cash items.
# All references to 'Operating profit' throughout this report represent 'Adjusted operating profit', an alternative performance measure defined in the glossary.
2.02 Release from Ops HY21
Changes in valuation assump- tions
Operating profit/ (loss) after tax
Operating profit/ (loss) before tax
New business surplus/ (strain)
Net release from operations
Release from operations1
Exper- ience variances
Non-cash items
Other2
Tax expense/ (credit)
For the six month period
to 30 June 2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
LGRI3
252
68
320
105
8
15
-
448
77
525
LGC
213
-
213
-
-
-
-
213
37
250
LGIM
163
-
163
-
-
-
-
163
41
204
Retail
262
23
285
16
1
1
(64)
239
53
292
- Insurance
151
8
159
4
1
4
(64)
104
30
134
- Retail Retirement3
111
15
126
12
-
(3)
-
135
23
158
Total from divisions
890
91
981
121
9
16
(64)
1,063
208
1,271
Group debt costs
(97)
-
(97)
-
-
-
-
(97)
(23)
(120)
Group investment projects and expenses
(30)
-
(30)
-
-
-
(31)
(61)
(11)
(72)
Total
763
91
854
121
9
16
(95)
905
174
1,079
2.02 Release from Ops FY21
Operating
New
Net
Changes in
Operating
profit/
Release
business
release
Exper-
valuation
profit/
Tax
(loss)
from
surplus/
from
ience
assump-
Non-cash
(loss) after
expense/
before
For the year ended
operations1
(strain)
operations
variances
tions
items
Other2
tax
(credit)
tax
31 December 2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
LGRI3
512
193
705
40
212
27
-
984
170
1,154
LGC
379
-
379
-
-
-
-
379
82
461
LGIM
342
-
342
-
-
-
-
342
80
422
Retail
463
54
517
28
121
2
(138)
530
90
620
- Insurance
236
27
263
14
82
6
(138)
227
41
268
- Retail Retirement3
227
27
254
14
39
(4)
-
303
49
352
Total from divisions
1,696
247
1,943
68
333
29
(138)
2,235
422
2,657
Group debt costs
(186)
-
(186)
-
-
-
-
(186)
(44)
(230)
Group investment projects and expenses
(69)
-
(69)
-
-
-
(68)
(137)
(28)
(165)
Total
1,441
247
1,688
68
333
29
(206)
1,912
350
2,262
1. Release from operations within Insurance includes £80m of dividends from US Insurance.
2. Other includes experience variances, changes in valuation assumptions and non-cash items relating to US Insurance.
3. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation. Further details are provided in Note 2.08.
2.03 Analysis of op. profit
LGRI1
Retail1
LGRI1
Retail1
LGRI1
Retail1
6 months
6 months
6 months
6 months
Full year
Full year
2022
2022
2021
2021
2021
2021
£m
£m
£m
£m
£m
£m
Net release from operations
466
343
320
285
705
517
Experience variances
- Persistency
-
(1)
-
(6)
1
(5)
- Mortality/morbidity
13
13
27
18
24
29
- Expenses
(7)
(7)
(1)
(4)
6
(1)
- Project and development costs
-
(1)
(2)
(1)
(11)
(19)
- Other
-
(7)
81
9
20
24
Total experience variances
6
(3)
105
16
40
28
Changes in valuation assumptions
- Persistency
-
-
-
-
-
(5)
- Mortality/morbidity
-
18
-
-
153
46
- Expenses
-
-
-
-
-
(1)
- Other
-
-
8
1
59
81
Total changes in valuation assumptions
-
18
8
1
212
121
Movement in non-cash items2
7
(2)
15
1
27
2
Other3
-
(77)
-
(64)
-
(138)
Operating profit after tax
479
279
448
239
984
530
Tax expense
81
53
77
53
170
90
Operating profit before tax
560
332
525
292
1,154
620
1. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation. Further details are provided in Note 2.08.
2. LGRI Movement in non-cash items is driven by the net effect of the capitalisation and unwind of future asset management profits on assets managed by LGIM, and is a function of new business volumes and movements in the main unit cost assumptions.
3. Other includes experience variances, changes in valuation assumptions (includes changes to assets allocation) and non-cash items relating to US Insurance.
2.04 LGC operating profit
6 months
6 months
Full year
2022
2021
2021
£m
£m
£m
Direct investments1
202
195
350
Traded investment portfolio including treasury assets2
61
55
111
Total LGC operating profit
263
250
461
1. Direct investments represents LGC's portfolio of assets across specialist commercial real estate, clean energy, housing and SME finance. Direct investments include operating profit in relation to CALA Homes of £98m (H1 21: £78m; FY 21: £132m).
2. The traded investment portfolio holds a diversified set of exposures across equities, fixed income, multi-asset funds and cash.
2.05 LGIM operating profit
6 months
6 months
Full year
2022
2021
2021
£m
£m
£m
Asset management revenue (excluding 3rd party market data)1
485
471
980
Asset management transactional revenue2
9
9
32
Asset management expenses (excluding 3rd party market data)1
(294)
(276)
(590)
Total LGIM operating profit
200
204
422
1. Asset management revenue and expenses exclude income and costs of £15m in relation to the provision of third party market data (H1 21: £18m; FY 21: £32m).
2. Transactional revenue from external clients includes execution fees, asset transition income, trigger fees, arrangement fees on property transactions and performance fees.
2.06 Investment and other var.
6 months
6 months
Full year
2022
2021
2021
£m
£m
£m
Investment variance related to protection liabilities1
617
230
111
Investment variance related to the traded investment portfolio and direct investments2
(308)
48
19
Other investment variance3
(83)
(23)
211
Investment variance
226
255
341
M&A related and other variances4
(19)
(11)
(108)
Total investment and other variances
207
244
233
1. The positive investment variance of £617m reflects the formulaic impact of an increase in UK and US government bond yields which have resulted in a higher discount rate used to calculate the group's protection liabilities.
2. The negative investment variance of £308m largely reflects volatile global equity market performance in the traded investment portfolio.
3. Other investment variance includes a negative variance in respect of the defined benefit pension scheme, reflecting the impact of the acquisition of annuity assets from LGRI and Retail Retirement, and the difference between the IAS 19 and annuity discount rates. This was partially offset by a positive variance from the UK annuity businesses, driven by good quality asset sourcing and improved cash flow matching within the portfolio.
4. M&A related and other variances includes gains and losses, expenses and intangible amortisation relating to acquisitions, disposals and restructuring as well as business start-up costs.
Investment variance includes differences between actual and long-term expected investment return on traded and real assets (including direct investments), economic assumption changes caused by changes in market conditions or expectations (e.g. credit default and inflation), the impact of any difference between the actual allocated asset mix and the single target long-term asset mix on new pension risk transfer business, and the yield associated with assets held for future new pension risk transfer business from the valuation discount rate.
The long-term expected investment return is based on opening economic assumptions applied to the assets under management at the start of the reporting year. The assumptions underlying the calculation of the expected returns for traded equity, commercial property and residential property are based on market consensus forecasts and long-term historic average returns expected to apply through the cycle. The long-term expected investment returns are:
6 months
6 months
Full year
2022
2021
2021
Equities
7%
7%
7%
Commercial property
5%
5%
5%
Residential property1
3.5%
RPI + 50bps
RPI + 50bps
1. In previous years the assumption RPI + 50bps was in line with average historical returns. Due to the current spike in inflation and in order to keep the rate aligned to average historical returns, it was updated to 3.5% in 2022.
Additionally, the LGC alternative asset portfolio comprises investments in housing, specialist commercial real estate, clean energy, and SME finance. The long-term expected investment return is on average between 8% and 10%, in line with our stated investment objectives. Rates of return specific to each asset are determined at the point of underwriting and reviewed and updated annually. The expected investment return includes assumptions on appropriate discount rates and inflation as well as sector specific assumptions including retail and commercial property yields and power prices.
2.07 EPS - basic
After tax
Per share1
After tax
Per share1
After tax
Per share1
6 months
6 months
6 months
6 months
Full year
Full year
2022
2022
2021
2021
2021
2021
£m
p
£m
p
£m
p
Profit for the period attributable to equity holders
1,153
19.47
1,065
17.96
2,050
34.58
Less: coupon payable in respect of restricted Tier 1 convertible notes net of tax relief
(11)
(0.19)
(11)
(0.18)
(23)
(0.39)
Total basic earnings
1,142
19.28
1,054
17.78
2,027
34.19
1. Basic earnings per share is calculated by dividing profit after tax by the weighted average number of ordinary shares in issue during the period, excluding employee scheme treasury shares.
2.07 EPS - diluted
After tax
Weighted average number of shares
Per share1
For the six month period to 30 June 2022
£m
m
p
Profit for the period attributable to equity holders
1,153
5,922
19.47
Net shares under options allocable for no further consideration
-
46
(0.15)
Conversion of restricted Tier 1 notes
-
307
(0.95)
Total diluted earnings
1,153
6,275
18.37
After tax
Weighted average number of shares
Per share1
For the six month period to 30 June 2021
£m
m
p
Profit for the period attributable to equity holders
1,065
5,929
17.96
Net shares under options allocable for no further consideration
-
45
(0.14)
Conversion of restricted Tier 1 notes
-
307
(0.86)
Total diluted earnings
1,065
6,281
16.96
After tax
Weighted average number of shares
Per share1
For the year ended 31 December 2021
£m
m
p
Profit for the year attributable to equity holders
2,050
5,929
34.58
Net shares under options allocable for no further consideration
-
59
(0.34)
Conversion of restricted Tier 1 notes
-
307
(1.67)
Total diluted earnings
2,050
6,295
32.57
1. For diluted earnings per share, the weighted average number of ordinary shares in issue, excluding employee scheme treasury shares, is adjusted to assume conversion of all potential ordinary shares, such as share options granted to employees and conversion of restricted Tier 1 notes.
2.08 Seg. analysis - profit
(a) Profit/(loss) for the period
Group
expenses
Retail
and debt
LGRI1
LGC
LGIM
Retirement1
Insurance
costs
Total
For the six month period to 30 June 2022
£m
£m
£m
£m
£m
£m
£m
Operating profit/(loss)#
560
263
200
147
185
(195)
1,160
Investment and other variances
133
(308)
(7)
53
617
(281)
207
Losses attributable to non-controlling interests
-
-
-
-
-
-
-
Profit/(loss) before tax attributable to equity holders
693
(45)
193
200
802
(476)
1,367
Tax (expense)/credit attributable to equity holders
(88)
2
(39)
(24)
(162)
97
(214)
Profit/(loss) for the period
605
(43)
154
176
640
(379)
1,153
Group
expenses
Retail
and debt
LGRI1
LGC
LGIM
Retirement1
Insurance
costs
Total
For the six month period to 30 June 2021
£m
£m
£m
£m
£m
£m
£m
Operating profit/(loss)#
525
250
204
158
134
(192)
1,079
Investment and other variances
75
48
(7)
30
230
(132)
244
Losses attributable to non-controlling interests
-
-
-
-
-
(3)
(3)
Profit/(loss) before tax attributable to equity holders
600
298
197
188
364
(327)
1,320
Tax (expense)/credit attributable to equity holders
(110)
(54)
(44)
(35)
(91)
76
(258)
Profit/(loss) for the period
490
244
153
153
273
(251)
1,062
Group
expenses
Retail
and debt
LGRI1
LGC
LGIM
Retirement1
Insurance
costs
Total
For the year ended 31 December 2021
£m
£m
£m
£m
£m
£m
£m
Operating profit/(loss)#
1,154
461
422
352
268
(395)
2,262
Investment and other variances
193
19
(11)
49
111
(128)
233
Losses attributable to non-controlling interests
-
-
-
-
-
(7)
(7)
Profit/(loss) before tax attributable to equity holders
1,347
480
411
401
379
(530)
2,488
Tax (expense)/credit attributable to equity holders
(213)
(93)
(79)
(63)
(59)
62
(445)
Profit/(loss) for the year
1,134
387
332
338
320
(468)
2,043
1. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation.
# All references to 'Operating profit' throughout this report represent 'Adjusted operating profit', an alternative performance measure defined in the glossary.
2.08 Seg. analysis - revenue
(i) Total revenue
6 months
6 months
Full year
2022
2021
2021
£m
£m
£m
Total income
(69,188)
14,898
45,450
Adjusted for:
Share of profit from associates and joint ventures, net of tax
(4)
(21)
(25)
Gain on disposal of subsidiaries, associates and joint ventures, and other operations
(10)
-
(149)
Total revenue
(69,202)
14,877
45,276
2.08 Seg. analysis - income
(ii) Total income
Retail
LGC and
LGRI1
LGIM2,3
Retirement1
Insurance
other4
Total
For the six month period to 30 June 2022
£m
£m
£m
£m
£m
£m
Internal income
-
92
-
-
(92)
-
External income
(6,845)
(61,289)
(2,688)
1,007
627
(69,188)
Total income
(6,845)
(61,197)
(2,688)
1,007
535
(69,188)
Retail
LGC and
LGRI1
LGIM2,3
Retirement1
Insurance
other4
Total
For the six month period to 30 June 2021
£m
£m
£m
£m
£m
£m
Internal income
-
80
-
-
(80)
-
External income
(20)
17,891
7
1,003
(3,983)
14,898
Total income
(20)
17,971
7
1,003
(4,063)
14,898
Retail
LGC and
LGRI1
LGIM2,3
Retirement1
Insurance
other4
Total
For the year ended 31 December 2021
£m
£m
£m
£m
£m
£m
Internal income
-
179
-
-
(179)
-
External income
4,842
35,738
1,117
2,029
1,724
45,450
Total income
4,842
35,917
1,117
2,029
1,545
45,450
1. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation.
2. LGIM internal income relates to investment management services provided to other segments.
3. LGIM external income primarily includes fees from fund management and investment returns on unit linked funds.
4. LGC and other includes LGC income, intra-segmental eliminations and group consolidation adjustments.
2.08 Seg. analysis - fees
2.08 Segmental analysis (continued)
(b) Revenue (continued)
(iii) Fees from fund management and investment contracts
Retail
LGC and other2
LGIM
Retirement1
Total
For the six month period to 30 June 2022
£m
£m
£m
£m
Investment contracts
-
49
-
49
Investment management fees
495
-
(92)
403
Transaction fees
9
-
-
9
Total fees from fund management and investment contracts3
504
49
(92)
461
Retail
LGC and other2
LGIM
Retirement1
Total
For the six month period to 30 June 2021
£m
£m
£m
£m
Investment contracts
-
46
-
46
Investment management fees
488
-
(80)
408
Transaction fees
9
-
-
9
Total fees from fund management and investment contracts3
497
46
(80)
463
Retail
LGC and other2
LGIM
Retirement1
Total
For the year ended 31 December 2021
£m
£m
£m
£m
Investment contracts
-
97
-
97
Investment management fees
1,009
-
(179)
830
Transaction fees
32
-
-
32
Total fees from fund management and investment contracts3
1,041
97
(179)
959
1. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation.
2. LGC and other includes LGC income, intra-segmental eliminations and group consolidation adjustments.
3. Fees from fund management and investment contracts are a component of Total revenue disclosed in Note 2.08 (b)(i).
2.08 Seg. analysis - other inc.
2.08 Segmental analysis (continued)
(b) Revenue (continued)
(iv) Other operational income from contracts with customers
Retail
LGC and other
Retirement1
Insurance
Total
For the six month period to 30 June 2022
£m
£m
£m
£m
House building
-
-
763
763
Professional services fees
4
41
-
45
Insurance broker
-
21
-
21
Total other operational income from contracts with customers2
4
62
763
829
Retail
LGC and other
Retirement1
Insurance
Total
For the six month period to 30 June 2021
£m
£m
£m
£m
House building
-
-
651
651
Professional services fees
1
49
-
50
Insurance broker
-
2
-
2
Total other operational income from contracts with customers2
1
51
651
703
Retail
LGC and other
Retirement1
Insurance
Total
For the year ended 31 December 2021
£m
£m
£m
£m
House building
-
-
1,314
1,314
Professional services fees
5
89
-
94
Insurance broker
-
11
-
11
Total other operational income from contracts with customers2
5
100
1,314
1,419
1. From 1 January 2022, following changes to business unit responsibilities within the Executive Committee, the group's reportable segments have been updated to align with its five core businesses. Prior period comparatives have been restated to reflect this change in segmentation.
2. Total other operational income from contracts with customers is a component of Total revenue disclosed in Note 2.08 (b)(i) and excludes the share of profit/loss from associates and joint ventures, and the gain on disposal of subsidiaries, associates and joint ventures, and other operations.
3.01 Consol. Income Statement
6 months
6 months
Full year
2022
2021
2021
For the six month period to 30 June 2022
Notes
£m
£m
£m
Income
Gross written premiums
6,612
4,263
10,375
Outward reinsurance premiums
(1,576)
(1,605)
(3,446)
Net change in provision for unearned premiums
8
35
42
Net premiums earned
5,044
2,693
6,971
Fees from fund management and investment contracts
461
463
959
Investment return
(75,536)
11,018
35,927
Other operational income
843
724
1,593
Total income
2.08
(69,188)
14,898
45,450
Expenses
Claims and change in insurance contract liabilities
(10,371)
540
7,353
Reinsurance recoveries
(295)
(1,313)
(2,968)
Net claims and change in insurance contract liabilities
(10,666)
(773)
4,385
Change in investment contract liabilities
(62,297)
12,232
34,206
Acquisition costs
416
436
825
Finance costs
145
157
294
Other expenses
1,774
1,445
3,108
Total expenses
(70,628)
13,497
42,818
Profit before tax
1,440
1,401
2,632
Tax expense attributable to policyholder returns
(73)
(81)
(144)
Profit before tax attributable to equity holders
1,367
1,320
2,488
Total tax expense
(287)
(339)
(589)
Tax expense attributable to policyholder returns
73
81
144
Tax expense attributable to equity holders
4.04
(214)
(258)
(445)
Profit for the period
1,153
1,062
2,043
Attributable to:
Non-controlling interests
-
(3)
(7)
Equity holders
1,153
1,065
2,050
Dividend distributions to equity holders during the period
4.02
792
754
1,063
Dividend distributions to equity holders proposed after the period end
4.02
324
309
790
p
p
p
Total basic earnings per share1
2.07
19.28
17.78
34.19
Total diluted earnings per share1
2.07
18.37
16.96
32.57
1. All earnings per share calculations are based on profit attributable to equity holders of the company.
3.02 Consol. SOCI
6 months
6 months
Full year
2022
2021
2021
For the six month period to 30 June 2022
£m
£m
£m
Profit for the period
1,153
1,062
2,043
Items that will not be reclassified subsequently to profit or loss
Actuarial remeasurements on defined benefit pension schemes
387
116
53
Tax (expense)/credit on actuarial remeasurements on defined benefit pension schemes
(97)
(20)
(7)
Total items that will not be reclassified subsequently to profit or loss
290
96
46
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of overseas operations
84
(11)
(11)
Movement in cross-currency hedge
5
6
20
Tax expense on movement in cross-currency hedge
(1)
(4)
(7)
Movement in financial investments designated as available-for-sale
3
(8)
(3)
Tax on movement in financial investments designated as available-for-sale
(1)
1
-
Total items that may be reclassified subsequently to profit or loss
90
(16)
(1)
Other comprehensive income after tax
380
80
45
Total comprehensive income for the period
1,533
1,142
2,088
Total comprehensive income/(expense) for the period attributable to:
Non-controlling interests
-
(3)
(7)
Equity holders
1,533
1,145
2,095
3.03 Consol. Balance Sheet
As at
As at
As at
30 Jun 2022
30 Jun 2021
31 Dec 2021
Notes
£m
£m
£m
Assets
Goodwill
71
68
68
Other intangible assets
406
377
365
Deferred acquisition costs
26
46
26
Investment in associates and joint ventures accounted for using the equity method
387
314
375
Property, plant and equipment
311
322
316
Investment property
4.03
10,976
9,080
10,150
Financial investments
4.03
462,329
519,762
538,374
Reinsurers' share of contract liabilities
6,040
6,947
7,180
Deferred tax assets
4.04
115
12
2
Current tax assets
699
612
670
Receivables and other assets
17,857
14,331
8,625
Cash and cash equivalents
24,774
16,397
16,487
Total assets
523,991
568,268
582,638
Equity
Share capital
4.05
149
149
149
Share premium
4.05
1,017
1,011
1,012
Employee scheme treasury shares
(138)
(90)
(99)
Capital redemption and other reserves
381
162
196
Retained earnings
9,775
8,620
9,228
Attributable to owners of the parent
11,184
9,852
10,486
Restricted Tier 1 convertible notes
4.06
495
495
495
Non-controlling interests
4.07
(36)
(34)
(38)
Total equity
11,643
10,313
10,943
Liabilities
Insurance contract liabilities
76,889
86,339
89,825
Investment contract liabilities
305,780
358,613
372,954
Core borrowings
4.08
4,356
4,542
4,256
Operational borrowings
4.09
1,182
1,138
932
Provisions
4.13
781
1,113
1,238
Deferred tax liabilities
4.04
407
277
251
Current tax liabilities
81
57
84
Payables and other financial liabilities
4.11
95,970
80,785
74,264
Other liabilities
894
640
925
Net asset value attributable to unit holders
26,008
24,451
26,966
Total liabilities
512,348
557,955
571,695
Total equity and liabilities
523,991
568,268
582,638
3.04 Consol. SOCIE HY22
Employee
Capital
Equity
Restricted
scheme
redemption
attributable
Tier 1
Non-
Share
Share
treasury
and other
Retained
to owners
convertible
controlling
Total
For the six month period to 30 June 2022
capital
premium
shares
reserves1
earnings
of the parent
notes
interests
equity
£m
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2022
149
1,012
(99)
196
9,228
10,486
495
(38)
10,943
Total comprehensive income for the period
-
-
-
90
1,443
1,533
-
-
1,533
Options exercised under share option schemes
-
5
-
-
-
5
-
-
5
Net movement in employee scheme treasury shares
-
-
(39)
(8)
10
(37)
-
-
(37)
Dividends
-
-
-
-
(792)
(792)
-
-
(792)
Coupon payable in respect of restricted Tier 1 convertible notes net of tax relief
-
-
-
-
(11)
(11)
-
-
(11)
Movement in third party interests
-
-
-
-
-
-
-
2
2
Currency translation differences
-
-
-
103
(103)
-
-
-
-
As at 30 June 2022
149
1,017
(138)
381
9,775
11,184
495
(36)
11,643
1. Capital redemption and other reserves as at 30 June 2022 include share-based payments £78m, foreign exchange £233m, capital redemption £17m, hedging £52m and available-for-sale reserves £1m.
3.04 Consol. SOCIE HY21
Employee
Capital
Equity
Restricted
scheme
redemption
attributable
Tier 1
Non-
Share
Share
treasury
and other
Retained
to owners
convertible
controlling
Total
For the six month period to 30 June 2021
capital
premium
shares
reserves1
earnings
of the parent
notes
interests
equity
£m
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2021
149
1,006
(75)
198
8,224
9,502
495
(31)
9,966
Total comprehensive income for the period
-
-
-
(16)
1,161
1,145
-
(3)
1,142
Options exercised under share option schemes
-
5
-
-
-
5
-
-
5
Net movement in employee scheme treasury shares
-
-
(15)
(15)
(5)
(35)
-
-
(35)
Dividends
-
-
-
-
(754)
(754)
-
-
(754)
Coupon payable in respect of restricted Tier 1 convertible notes net of tax relief
-
-
-
-
(11)
(11)
-
-
(11)
Currency translation differences
-
-
-
(5)
5
-
-
-
-
As at 30 June 2021
149
1,011
(90)
162
8,620
9,852
495
(34)
10,313
1. Capital redemption and other reserves as at 30 June 2021 include share-based payments £86m, foreign exchange £27m, capital redemption £17m, hedging £37m and available-for-sale reserves £(5)m.
3.04 Consol. SOCIE YE21
Employee
Capital
Equity
Restricted
scheme
redemption
attributable
Tier 1
Non-
Share
Share
treasury
and other
Retained
to owners
convertible
controlling
Total
For the year ended 31 December 2021
capital
premium
shares
reserves1
earnings
of the parent
notes
interests
equity
£m
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2021
149
1,006
(75)
198
8,224
9,502
495
(31)
9,966
Total comprehensive income for the year
-
-
-
(1)
2,096
2,095
-
(7)
2,088
Options exercised under share option schemes
-
6
-
-
-
6
-
-
6
Net movement in employee scheme treasury shares
-
-
(24)
(15)
8
(31)
-
-
(31)
Dividends
-
-
-
-
(1,063)
(1,063)
-
-
(1,063)
Coupon payable in respect of restricted Tier 1 convertible notes net of tax relief
-
-
-
-
(23)
(23)
-
-
(23)
Currency translation differences
-
-
-
14
(14)
-
-
-
-
As at 31 December 2021
149
1,012
(99)
196
9,228
10,486
495
(38)
10,943
1. Capital redemption and other reserves as at 31 December 2021 include share-based payments £86m, foreign exchange £46m, capital redemption £17m, hedging £48m and available-for-sale reserves £(1)m.
3.05 Consol. Cash Flow
6 months
6 months
Full year
2022
2021
2021
For the six month period to 30 June 2022
Notes
£m
£m
£m
Cash flows from operating activities
Profit for the period
1,153
1,062
2,043
Adjustments for non cash movements in net profit for the period
Net losses/(gains) on financial investments and investment property
80,187
(5,227)
(26,062)
Investment income
(4,651)
(5,790)
(9,865)
Interest expense
145
157
294
Tax expense
287
339
589
Other adjustments
88
44
137
Net decrease/(increase) in operational assets
Investments held for trading or designated as fair value through profit or loss
14,200
5,804
4,616
Investments designated as available-for-sale
(3)
15
(21)
Other assets
(8,086)
(4,931)
139
Net (decrease)/increase in operational liabilities
Insurance contracts
(13,621)
(2,615)
726
Investment contracts
(67,182)
15,069
29,409
Other liabilities
2,481
(10,114)
(11,161)
Cash utilised in operations
4,998
(6,187)
(9,156)
Interest paid
(139)
(160)
(301)
Interest received
1,808
3,368
5,060
Rent received
185
184
373
Tax paid1
(376)
(276)
(564)
Dividends received
2,491
2,307
4,419
Net cash flows from operations
8,967
(764)
(169)
Cash flows from investing activities
Acquisition of plant, equipment, intangibles and other assets
(60)
(137)
(205)
Disposal of plant, equipment, intangibles and other assets
-
2
-
Acquisition of operations, net of cash acquired
4.16
(2)
-
-
Disposal of subsidiaries and other operations, net of cash transferred
-
-
217
Investment in joint ventures and associates
(34)
(2)
(56)
Disposal of joint ventures and associates
40
-
177
Net cash flows (utilised)/generated from investing activities
(56)
(137)
133
Cash flows from financing activities
Dividend distributions to ordinary equity holders during the period
4.02
(792)
(754)
(1,063)
Coupon payment in respect of restricted Tier 1 convertible notes, gross of tax
4.06
(14)
(14)
(28)
Options exercised under share option schemes
4.05
5
5
6
Treasury shares purchased for employee share schemes
(50)
(24)
(34)
Payment of lease liabilities
(18)
(17)
(37)
Proceeds from borrowings
4.1
385
252
449
Repayment of borrowings
4.1
(210)
(162)
(798)
Net cash flows utilised in financing activities
(694)
(714)
(1,505)
Net increase/(decrease) in cash and cash equivalents
8,217
(1,615)
(1,541)
Exchange gains/(losses) on cash and cash equivalents
70
(8)
8
Cash and cash equivalents at 1 January
16,487
18,020
18,020
Cash and cash equivalents at 30 June/31 December
24,774
16,397
16,487
1. Tax comprises UK corporation tax paid of £223m (H1 21: £155m; FY 21: £368m), withholding tax of £147m (H1 21: £118m; FY 21: £188m) and overseas corporate tax of £6m (H1 21: £3m; FY 21: £8m).
4.02 Dividends
Dividend
Per share1
Dividend
Per share1
Dividend
Per share1
6 months
6 months
6 months
6 months
Full year
Full year
2022
2022
2021
2021
2021
2021
£m
p
£m
p
£m
p
Ordinary dividends paid and charged to equity in the period:
- Final 2020 dividend paid in June 2021
-
-
754
12.64
754
12.64
- Interim 2021 dividend paid in September 2021
-
-
-
-
309
5.18
- Final 2021 dividend paid in June 2022
792
13.27
-
-
-
-
Total dividends2
792
13.27
754
12.64
1,063
17.82
1. The dividend per share calculation is based on the number of equity shares registered on the ex-dividend date.
2. The dividend proposed at 31 December 2021 was £790m based on the current number of eligible equity shares on that date.
Subsequent to 30 June 2022, the directors declared an interim dividend of 5.44 pence per ordinary share. This dividend will be paid on 26 September 2022. It will be accounted for as an appropriation of retained earnings in the year ended 31 December 2022 and is not included as a liability in the Consolidated Balance Sheet as at 30 June 2022.
4.03 Total fin. investments
30 Jun
30 Jun
31 Dec
2022
2021
2021
£m
£m
£m
Equities1
182,847
207,803
213,049
Debt securities2,3
237,976
278,858
296,930
Derivative assets4
28,017
15,449
16,792
Loans5
13,489
17,652
11,603
Financial investments
462,329
519,762
538,374
Investment property
10,976
9,080
10,150
Total financial investments and investment property
473,305
528,842
548,524
1. Equity securities include investments in unit trusts of £17,572m (30 June 2021: £15,681m; 31 December 2021: £18,248m).
2. Debt securities include accrued interest of £1,497m (30 June 2021: £1,389m; 31 December 2021: £1,420m).
3. A detailed analysis of debt securities to which shareholders are directly exposed is disclosed in Note 7.03.
4. Derivatives are used for efficient portfolio management, especially the use of interest rate swaps, inflation swaps, credit default swaps and foreign exchange forward contracts for asset and liability management. Derivative assets are shown gross of derivative liabilities of £34,044m (30 June 2021: £18,249m; 31 December 2021: £15,718m).
5. Loans include £101m (30 June 2021: £149m; 31 December 2021: £92m) of loans valued at amortised cost.
4.03 FV fin. investments HY22
4.03 Financial investments and Investment property (continued)
(a) Fair value hierarchy (continued)
Total
Level 1
Level 2
Level 3
For the six month period to 30 June 2022
£m
£m
£m
£m
Shareholder1
Equity securities
3,492
1,995
22
1,475
Debt securities
76,814
27,622
27,265
21,927
Derivative assets
25,071
6
25,065
-
Loans at fair value2
1,701
-
1,701
-
Investment property
6,156
-
-
6,156
Total Shareholder
113,234
29,623
54,053
29,558
Unit linked
Equity securities
179,355
178,691
25
639
Debt securities
161,162
129,689
30,836
637
Derivative assets
2,946
125
2,821
-
Loans at fair value
11,687
-
11,687
-
Investment property
4,820
-
-
4,820
Total Unit linked
359,970
308,505
45,369
6,096
Total financial investments and investment property at fair value2
473,204
338,128
99,422
35,654
&"Arial"&10&KFF8C00Confidential&1#
4.03 FV fin. investments HY21
Total
Level 1
Level 2
Level 3
For the six month period to 30 June 2021
£m
£m
£m
£m
Shareholder1
Equity securities
3,088
1,821
4
1,263
Debt securities
82,699
34,034
26,375
22,290
Derivative assets
14,019
2
14,017
-
Loans at fair value2
4,152
-
4,152
-
Investment property
5,103
-
-
5,103
Total Shareholder
109,061
35,857
44,548
28,656
Unit linked
Equity securities
204,715
204,055
23
637
Debt securities
196,159
146,780
49,029
350
Derivative assets
1,430
89
1,341
-
Loans at fair value
13,351
-
13,351
-
Investment property
3,977
-
-
3,977
Total Unit linked
419,632
350,924
63,744
4,964
Total financial investments and investment property at fair value2
528,693
386,781
108,292
33,620
1. All non-unit linked assets are classified as Shareholder assets. Shareholders of the group are directly exposed to market and credit risk on those assets including those backing the non-profit-non-unit linked business.
2. The above tables exclude loans (including accrued interest) of £101m, which are held at amortised cost (30 June 2021: £149m).
&"Arial"&10&KFF8C00Confidential&1#
4.03 FV fin. investments YE21
4.03 Financial investments and investment property (continued)
(a) Fair value hierarchy (continued)
Total
Level 1
Level 2
Level 3
For the year ended 31 December 2021
£m
£m
£m
£m
Shareholder1
Equity securities
3,185
1,854
63
1,268
Debt securities
86,803
32,593
29,887
24,323
Derivative assets
13,203
9
13,194
-
Loans at fair value2
2,240
-
2,240
-
Investment property
5,710
-
-
5,710
Total Shareholder
111,141
34,456
45,384
31,301
Unit linked
Equity securities
209,864
209,119
25
720
Debt securities
210,127
170,838
38,726
563
Derivative assets
3,589
90
3,499
-
Loans at fair value
9,271
-
9,271
-
Investment property
4,440
-
-
4,440
Total Unit linked
437,291
380,047
51,521
5,723
Total financial investments and investment property at fair value2
548,432
414,503
96,905
37,024
1. All non-unit linked assets are classified as Shareholder assets. Shareholders of the group are directly exposed to market and credit risk on those assets including those backing the non-profit-non-unit linked business.
2. This table excludes loans (including accrued interest) of £92m, which are held at amortised cost.
&"Arial"&10&KFF8C00Confidential&1#
4.03 Inv. property by sector
The below table breaks down the investment property by sector.
30 Jun
30 Jun
31 Dec
2022
2021
2021
£m
£m
£m
Retail
951
962
1,025
Leisure
505
453
482
Distribution
1,613
1,277
1,552
Office space
4,688
3,832
4,223
Industrial and other commercial
2,005
1,803
1,767
Accommodation
1,214
753
1,101
Total investment property
10,976
9,080
10,150
&"Arial"&10&KFF8C00Confidential&1#
4.03 Fin. investments lev. 3 FV
4.03 Financial investments and investment property (continued)
(b) Level 3 assets measured at fair value (continued)
Other
Other
Equity
financial
Investment
Equity
financial
Investment
securities
investments
property
Total
securities
investments
property
Total
2022
2022
2022
2022
2021
2021
2021
2021
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January
1,988
24,886
10,150
37,024
1,801
21,957
8,475
32,233
Total gains/(losses) for the period
- in other comprehensive income
-
3
-
3
-
(8)
-
(8)
- realised gains/(losses)1
6
(5)
30
31
1
(9)
-
(8)
- unrealised gains/(losses)1
144
(3,643)
571
(2,928)
97
(422)
249
(76)
Purchases/Additions
179
2,110
330
2,619
90
2,007
449
2,546
Sales/Disposals
(266)
(1,105)
(105)
(1,476)
(59)
(821)
(93)
(973)
Transfers into Level 3
67
-
-
67
-
8
-
8
Transfers out of Level 3
(10)
-
-
(10)
(30)
(44)
-
(74)
Foreign exchange rate movements
6
318
-
324
-
(28)
-
(28)
As at 30 June
2,114
22,564
10,976
35,654
1,900
22,640
9,080
33,620
Other
Equity
financial
Investment
securities
investments
property
Total
2021
2021
2021
2021
£m
£m
£m
£m
As at 1 January
1,801
21,957
8,475
32,233
Total gains/(losses) for the year
- in other comprehensive income
-
(3)
-
(3)
- realised gains/(losses)1
31
12
(4)
39
- unrealised gains or (losses)1
208
(87)
1,028
1,149
Purchases/Additions
130
5,429
985
6,544
Sales/Disposals
(153)
(2,351)
(334)
(2,838)
Transfers into Level 3
2
10
-
12
Transfers out of Level 3
(31)
(112)
-
(143)
Foreign exchange rate movements
-
31
-
31
As at 31 December
1,988
24,886
10,150
37,024
1. Realised and unrealised gains/(losses) are recognised in investment return in the Consolidated Income Statement.
&"Arial"&10&KFF8C00Confidential&1#
4.03 Change in assumptions
Sensitivities
Fair value 30 June 2022 £m
Positive impact £m
Negative impact £m
Lifetime mortgages
5,758
216
(216)
Private credit portfolios
15,127
821
(821)
Investment property
10,976
915
(1,075)
Other investments1
3,793
339
(274)
Total Level 3 assets
35,654
2,291
(2,386)
1. Other investments include Level 3 equity securities, income strip assets and other traded debt securities which are Level 3.
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4.04 IFRS -Tax charge
(a) Tax expense in the Consolidated Income Statement
The tax expense attributable to equity holders differs from the tax calculated at the standard UK corporation tax rate as follows:
6 months
6 months
Full year
2022
2021
2021
£m
£m
£m
Profit before tax attributable to equity holders
1,367
1,320
2,488
Tax calculated at 19.00%
260
251
473
Adjusted for the effects of:
Recurring reconciling items:
(Lower)/higher rate of tax on profits taxed overseas1
(32)
(32)
(104)
Non-deductible expenses
-
4
6
Differences between taxable and accounting investment gains
(6)
(9)
(13)
Foreign tax
1
-
-
Unrecognised tax losses
1
-
1
Other
3
-
-
Non-recurring reconciling items:
Adjustments in respect of prior years2
(1)
12
24
Impact of the revaluation of deferred tax balances3
(12)
32
58
Tax expense attributable to equity holders
214
258
445
Equity holders' effective tax rate
15.7%
19.5%
17.9%
1. The lower rate of tax on overseas profits is principally driven by the 0% rate of taxation arising in our Bermudan reinsurance company, which provides the group with regulatory capital flexibility for both our PRT business and our US term insurance business. This also includes the impact of our US operations which are taxed at 21%.
2. Adjustments in respect of prior years relate to revisions of prior estimates.
3. The Finance Act 2021 increased the rate of corporation tax from 19% to 25% from 1 April 2023. The prevailing rate of UK corporation tax for the year remained at 19%. The future enacted tax rate of 25% has been used in the calculation of UK deferred tax assets and liabilities in respect of temporary differences arising in the period, being the rate of corporation tax that is expected to apply when the majority of those deferred tax balances reverse.
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4.04 IFRS - Deferred tax
(b) Deferred tax
30 Jun 2022
30 Jun 2021
31 Dec 2021
Deferred tax (liabilities)/assets
£m
£m
£m
Overseas deferred acquisition expenses
110
88
95
Difference between the tax and accounting value of insurance contracts
(901)
(652)
(695)
- UK
(198)
(231)
(269)
- Overseas
(703)
(421)
(426)
Realised and unrealised gains on investments1
79
(22)
(83)
Excess of depreciation over capital allowances
20
23
22
Excess expenses
-
1
-
Accounting provisions and other
32
(37)
55
Trading losses2
410
320
348
Pension fund deficit
(42)
15
9
Acquired intangibles
-
(1)
-
Net deferred tax liabilities
(292)
(265)
(249)
Analysed by:
- Deferred tax assets1
115
12
2
- UK deferred tax liabilities
(218)
(209)
(215)
- Overseas deferred tax liabilities2
(189)
(68)
(36)
Net deferred tax liabilities
(292)
(265)
(249)
1. The deferred tax asset represents £113m of US unrealised losses on investments (H1 21: £nil; FY 21: £nil) and £2m of UK restricted losses (H1 21: £12m; FY 21: £2m) that are not capable of being offset against other deferred tax liabilities or future trading profits.
2. Trading losses include UK trade and US operating losses of £3m (H1 21: £12m; FY 21: £2m) and £407m (H1 21: £308m; FY 21: £346m) respectively. Overseas net deferred tax liabilities is wholly comprised of US balances as at 30 June 2022 and includes the US deferred tax asset. The losses are not time restricted, and we expect to recover them over a period of 15 to 20 years, commensurate with the lifecycle of the underlying insurance contracts. In reaching this conclusion, we have considered past results, the different basis under which US companies are taxed, temporary differences that are expected to generate future profits against which the deferred tax can be offset, management actions, and future profit forecasts. The recoverability of deferred tax assets is routinely reviewed by management.
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4.05 Share cap. and share prem
Number of
Authorised share capital
shares
£m
At 30 June 2022, 30 June 2021 and 31 December 2021: ordinary shares of 2.5p each
9,200,000,000
230
Share
Share
Number of
capital
premium
Issued share capital, fully paid
shares
£m
£m
As at 1 January 2022
5,970,415,817
149
1,012
Options exercised under share option schemes
2,162,898
-
5
As at 30 June 2022
5,972,578,715
149
1,017
Share
Share
Number of
capital
premium
Issued share capital, fully paid
shares
£m
£m
As at 1 January 2021
5,967,358,713
149
1,006
Options exercised under share option schemes
2,500,221
-
5
As at 30 June 2021
5,969,858,934
149
1,011
Options exercised under share option schemes
556,883
-
1
As at 31 December 2021
5,970,415,817
149
1,012
There is one class of ordinary shares of 2.5p each. All shares issued carry equal voting rights.
The holders of the company's ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholder meetings of the company.
&"Arial"&10&KFF8C00Confidential&1#
4.08 Core borrowings
Carrying
Carrying
Carrying
amount
Fair value
amount
Fair value
amount
Fair value
30 Jun
30 Jun
30 Jun
30 Jun
31 Dec
31 Dec
2022
2022
2021
2021
2021
2021
£m
£m
£m
£m
£m
£m
Subordinated borrowings
10% Sterling subordinated notes 20411
-
-
313
315
-
-
5.5% Sterling subordinated notes 2064
590
546
589
771
590
776
5.375% Sterling subordinated notes 2045
604
610
604
699
604
673
5.25% US Dollar subordinated notes 2047
707
690
621
703
635
694
5.55% US Dollar subordinated notes 2052
414
416
364
413
373
428
5.125% Sterling subordinated notes 2048
400
391
400
478
400
461
3.75% Sterling subordinated notes 2049
598
523
598
659
598
632
4.5% Sterling subordinated notes 2050
500
456
500
582
500
558
Client fund holdings of group debt2
(50)
(46)
(41)
(49)
(44)
(51)
Total subordinated borrowings
3,763
3,586
3,948
4,571
3,656
4,171
Senior borrowings
Sterling medium term notes 2031-2041
602
707
603
866
609
846
Client fund holdings of group debt2
(9)
(10)
(9)
(12)
(9)
(11)
Total senior borrowings
593
697
594
854
600
835
Total core borrowings
4,356
4,283
4,542
5,425
4,256
5,006
1. These notes were redeemed in full on 23 July 2021.
2. £59m (30 June 2021: £50m; 31 December 2021: £53m) of the group's subordinated and senior borrowings are held by Legal & General customers through unit linked products. These borrowings are shown as a deduction from total core borrowings in the table above.
The presented fair values of the group's core borrowings reflect quoted prices in active markets and they have been classified as Level 1 in the fair value hierarchy.
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4.09 Operational borrowings
Carrying
Carrying
Carrying
amount
Fair value
amount
Fair value
amount
Fair value
30 Jun
30 Jun
30 Jun
30 Jun
31 Dec
31 Dec
2022
2022
2021
2021
2021
2021
£m
£m
£m
£m
£m
£m
Euro Commercial Paper
50
50
50
50
50
50
Non-recourse borrowings
1,004
1,004
1,064
1,064
874
874
Bank loans and overdrafts
91
91
2
2
-
-
Operational borrowings1
1,145
1,145
1,116
1,116
924
924
1. Unit linked borrowings with a carrying value of £37m (30 June 2021: £22m; 31 December 2021: £8m) are excluded from the analysis above as the risk is retained by policyholders. Operational borrowings including unit linked borrowings are £1,182m (30 June 2021: £1,138m; 31 December 2021: £932m).
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4.10 Movement in borrowings
4.10 Movement in borrowings
30 Jun
30 Jun
31 Dec
2022
2021
2021
£m
£m
£m
As at 1 January
5,188
5,613
5,613
Cash movements:
- Proceeds from borrowings
265
269
503
- Repayment of borrowings
(210)
(162)
(798)
- Net increase/(decrease) in bank loans and overdrafts
120
(17)
(54)
Non-cash movements:
- Amortisation
1
1
3
- Foreign exchange rate movements
184
(19)
10
- Other
(10)
(5)
(89)
Core and operational borrowings
5,538
5,680
5,188
&"Arial"&10&KFF8C00Confidential&1#
4.11 Payables and other fin.
30 Jun 2022
30 Jun 2021
31 Dec 2021
£m
£m
£m
Derivative liabilities
34,044
18,249
15,718
Repurchase agreements1
47,103
47,703
46,331
Other financial liabilities2
14,823
14,833
12,215
Total payables and other financial liabilities
95,970
80,785
74,264
1. The repurchase agreements are presented gross, however they and their related assets (included within debt securities) are subject to master netting arrangements. The significant majority of the repurchase agreements are unit linked.
2. Other financial liabilities includes trail commission, lease liabilities, FX spots and the value of short positions taken out to cover reverse repurchase agreements. The value of short positions as at 30 June 2022 was £4,779m (30 June 2021: £4,320m; 31 December 2021: £5,418m).
Fair value hierarchy
Amortised
Total
Level 1
Level 2
Level 3
cost1
As at 30 June 2022
£m
£m
£m
£m
£m
Derivative liabilities
34,044
291
33,713
40
-
Repurchase agreements
47,103
-
47,103
-
-
Other financial liabilities
14,823
4,815
81
-
9,927
Total payables and other financial liabilities
95,970
5,106
80,897
40
9,927
Amortised
Total
Level 1
Level 2
Level 3
cost1
As at 30 June 2021
£m
£m
£m
£m
£m
Derivative liabilities
18,249
397
17,780
72
-
Repurchase agreements
47,703
-
47,703
-
-
Other financial liabilities
14,833
5,484
15
10
9,324
Total payables and other financial liabilities
80,785
5,881
65,498
82
9,324
Amortised
Total
Level 1
Level 2
Level 3
cost1
As at 31 December 2021
£m
£m
£m
£m
£m
Derivative liabilities
15,718
331
15,316
71
-
Repurchase agreements
46,331
-
46,331
-
-
Other financial liabilities
12,215
5,438
55
-
6,722
Total payables and other financial liabilities
74,264
5,769
61,702
71
6,722
1. The carrying value of payables and other financial liabilities at amortised cost approximates its fair value.
Significant transfers between levels There have been no significant transfers of liabilities between Levels 1, 2 and 3 for the period ended 30 June 2022 (30 June 2021 and 31 December 2021: no significant transfers).
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4.12 Foreign exchange rates
Principal rates of exchange used for translation are:
Period end exchange rates
30 Jun 2022
30 Jun 2021
31 Dec 2021
United States dollar
1.22
1.38
1.35
Euro
1.16
1.17
1.19
6 months
6 months
Full year
Average exchange rates
2022
2021
2021
United States dollar
1.30
1.39
1.38
Euro
1.19
1.15
1.16
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4.13 Provisions
30 Jun 2022
30 Jun 2021
31 Dec 2021
Note
£m
£m
£m
Other provisions
4.13 (a)
182
108
213
Retirement benefit obligations
4.13 (b)
599
1,005
1,025
Total provisions
781
1,113
1,238
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4.15 Related party transactions
4.15 Related party transactions
(i) Key management personnel transactions and compensation
There were no material transactions between key management and the Legal & General group of companies during the period. All transactions between the group and its key management are on commercial terms which are no more favourable than those available to employees in general. Contributions to the post-employment defined benefit plans were £51m (30 June 2021: £52m; 31 December 2021: £109m) for all employees.
At 30 June 2022, 30 June 2021 and 31 December 2021 there were no loans outstanding to officers of the company.
The aggregate compensation for key management personnel, including executive and non-executive directors, is as follows:
6 months
6 months
Full year
2022
2021
2021
£m
£m
£m
Salaries
3
3
10
Share-based incentive awards
5
5
5
Key management personnel compensation
8
8
15
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5.01 LGIM total AUM
5.01 LGIM total assets under management1 (AUM)
Active
Multi
Real
Total
Index
strategies
asset
Solutions2
assets
AUM
For the six month period to 30 June 2022
£bn
£bn
£bn
£bn
£bn
£bn
As at 1 January 2022
502.4
198.8
78.0
605.1
37.2
1,421.5
External inflows3
63.2
7.0
6.8
21.3
1.4
99.7
External outflows3
(38.2)
(4.2)
(3.7)
(12.5)
(1.1)
(59.7)
Overlay net flows
-
-
-
25.6
-
25.6
External net flows4
25.0
2.8
3.1
34.4
0.3
65.6
PRT transfers5
-
-
-
(0.4)
-
(0.4)
Internal net flows6
(0.4)
0.2
-
(0.7)
0.4
(0.5)
Total net flows
24.6
3.0
3.1
33.3
0.7
64.7
Market movements
(57.8)
(25.2)
(8.0)
(102.4)
(1.9)
(195.3)
Other movements7
0.4
1.6
-
(3.2)
-
(1.2)
As at 30 June 2022
469.6
178.2
73.1
532.8
36.0
1,289.7
Assets attributable to:
External
1,190.7
Internal
99.0
Active
Multi
Real
Total
Index
strategies
asset
Solutions2
assets
AUM
For the six month period to 30 June 2021
£bn
£bn
£bn
£bn
£bn
£bn
As at 1 January 2021
429.9
193.6
65.7
557.2
32.5
1,278.9
External inflows3
47.8
10.0
4.9
20.2
0.6
83.5
External outflows3
(43.1)
(7.7)
(3.1)
(8.0)
(0.8)
(62.7)
Overlay net flows
-
-
-
6.6
-
6.6
External net flows4
4.7
2.3
1.8
18.8
(0.2)
27.4
PRT transfers5
(0.4)
(0.5)
-
(2.8)
-
(3.7)
Internal net flows6
(0.3)
(2.3)
0.1
(0.2)
1.0
(1.7)
Total net flows
4.0
(0.5)
1.9
15.8
0.8
22.0
Market movements
37.9
(4.3)
4.2
(19.2)
0.4
19.0
Other movements7
(0.4)
1.3
-
6.0
-
6.9
As at 30 June 2021
471.4
190.1
71.8
559.8
33.7
1,326.8
Assets attributable to:
External
1,213.6
Internal
113.2
1. Assets under management (AUM) includes assets on our Investment Only Platform that are managed by third parties, on which fees are earned.
2. Solutions include liability driven investments and £386.9bn (30 June 2021: £345.3bn) of derivative notionals associated with the Solutions business.
3. External inflows and outflows include £2.3bn (30 June 2021: £3.3bn) of external investments and £2.0bn (30 June 2021: £1.2bn) of redemptions in the ETF business.
4. External net flows exclude movements in short-term Solutions assets, as their maturity dates are determined by client agreements and are subject to a higher degree of variability. The total value of these assets at 30 June 2022 was £68.8bn (30 June 2021: £51.5bn).
5. PRT transfers reflect UK defined benefit pension scheme buy-outs to LGRI.
6. Internal net flows includes legacy assets from the Mature Savings business sold to ReAssure in 2020.
7. Other movements include movements of external holdings in money market funds, other cash mandates and short-term solutions assets.
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5.01 LGIM total AUM YE21
5.01 LGIM total assets under management1 (AUM) (continued)
Active
Multi
Real
Total
Index
strategies
asset
Solutions2
assets
AUM
For the year ended 31 December 2021
£bn
£bn
£bn
£bn
£bn
£bn
As at 1 January 2021
429.9
193.6
65.7
557.2
32.5
1,278.9
External inflows3
99.4
18.7
15.1
34.4
1.7
169.3
External outflows3
(94.5)
(15.8)
(8.1)
(25.5)
(1.8)
(145.7)
Overlay net flows
-
-
-
11.0
-
11.0
External net flows4
4.9
2.9
7.0
19.9
(0.1)
34.6
PRT transfers5
(0.6)
(0.7)
-
(2.9)
-
(4.2)
Internal net flows6
(1.0)
(1.8)
0.2
(1.5)
2.0
(2.1)
Total net flows
3.3
0.4
7.2
15.5
1.9
28.3
Market movements
68.7
1.8
5.1
8.6
2.8
87.0
Other movements7
0.5
3.0
-
23.8
-
27.3
As at 31 December 2021
502.4
198.8
78.0
605.1
37.2
1,421.5
Assets attributable to:
External
1,306.3
Internal
115.2
1. Assets under management (AUM) includes assets on our Investment Only Platform, that are managed by third parties, on which fees are earned.
2. Solutions include liability driven investments and £383.2bn of derivative notionals associated with the Solutions business.
3. External inflows and outflows include £5.5bn of external investments and £3.0bn of redemptions in the ETF business.
4. External net flows exclude movements in short-term Solutions assets, as their maturity dates are determined by client agreements and are subject to a higher degree of variability. The total value of these assets at 31 December 2021 was £71.2bn.
5. PRT transfers reflect UK defined benefit pension scheme buy-outs to LGRI.
6. Internal net flows include flows in legacy assets from the Mature Savings business sold to ReAssure in 2020.
7. Other movements include movements of external holdings in money market funds, other cash mandates and short-term solutions assets.
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5.02 LGIM AUM net flows
5.02 LGIM total external assets under management and net flows
Assets under management at
Net flows for the six months ended1
30 Jun
30 Jun
31 Dec
30 Jun
30 Jun
31 Dec
2022
2021
2021
2022
2021
2021
£bn
£bn
£bn
£bn
£bn
£bn
International2
377.1
344.8
377.3
34.5
15.0
14.5
UK Institutional
- Defined contribution
129.4
125.5
137.7
6.9
4.4
5.0
- Defined benefit
630.3
689.6
733.3
22.5
4.6
(13.9)
Wholesale3
45.5
45.5
49.1
1.4
1.3
1.2
ETF4
8.4
8.2
8.9
0.3
2.1
0.4
Total external
1,190.7
1,213.6
1,306.3
65.6
27.4
7.2
1. External net flows exclude movements in short-term solutions assets, with maturity as determined by client agreements and are subject to a higher degree of variability.
2. International assets are shown on the basis of client domicile. Total International AUM including assets managed internationally on behalf of UK clients amounted to £468bn as at 30 June 2022 (30 June 2021: £434bn; 31 December 2021: £479bn).
3. Wholesale represents assets from the Retail Intermediary business and £0.3bn of assets from Personal Investing customers that did not migrate to Fidelity International Limited.
4. ETF reflects external AUM and flows invested on the platform. Total AUM managed on the platform is £9.9bn ($12.0bn) in H1 22 (H1 21: £9.4bn ($13.0bn); FY 21: £10.1bn ($13.7bn)) and flows of £0.6bn ($0.8bn) in H1 22 (H1 21: £2.5bn ($3.4bn); FY 21: £2.9bn ($3.9bn)) which include internal investment from other LGIM asset classes.
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5.03 Rec. of AUM to BS
5.03 Reconciliation of assets under management to Consolidated Balance Sheet financial investments, investment property and cash and cash equivalents
30 Jun 2022
30 Jun 2021
31 Dec 2021
£bn
£bn
£bn
Assets under management
1,290
1,327
1,421
Derivative notionals1
(387)
(351)
(383)
Third party assets2
(429)
(441)
(480)
Other3
24
10
7
Financial investments, investment property and cash and cash equivalents
498
545
565
1. Derivative notionals are included in the assets under management measure but are not for IFRS reporting and are thus removed.
2. Third party assets are those that LGIM manage on behalf of others which are not included on the group's Consolidated Balance Sheet.
3. Other includes assets that are managed by third parties on behalf of the group, other assets and liabilities related to financial investments, derivative assets and pooled funds.
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5.04 LGIM total AUA
5.04 Assets under administration
Workplace1
Annuities2
Workplace
Annuities
Workplace
Annuities
30 Jun 2022
30 Jun 2022
30 Jun 2021
30 Jun 2021
31 Dec 2021
31 Dec 2021
£bn
£bn
£bn
£bn
£bn
£bn
As at 1 January
65.7
89.9
50.8
87.0
50.8
87.0
Gross inflows
6.1
5.0
7.5
3.7
11.9
8.7
Gross outflows
(1.8)
-
(1.5)
-
(3.4)
-
Payments to pensioners
-
(2.4)
-
(2.2)
-
(4.6)
Net flows
4.3
2.6
6.0
1.5
8.5
4.1
Market and other movements
(6.9)
(13.7)
3.4
(2.7)
6.4
(1.2)
As at 30 June/31 December
63.1
78.8
60.2
85.8
65.7
89.9
1. Workplace assets under administration as at 30 June 2022 includes £63.0bn (30 June 2021: £60.1bn; 31 December 2021: £65.6bn) of assets under management included in Note 5.01.
2. Annuities assets under administration as at 30 June 2022 includes £69.9bn (30 June 2021: £77.3bn; 31 December 2021: £80.6bn) of assets under management included in Note 5.01.
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5.05 LGRI new business
5.05 LGRI new business
6 months
6 months
6 months
Full year
30 Jun
30 Jun
31 Dec
31 Dec
2022
2021
2021
2021
£m
£m
£m
£m
Pension risk transfer
- UK1
3,715
2,965
3,275
6,240
- US
593
107
682
789
- Bermuda
141
-
147
147
Total LGRI new business
4,449
3,072
4,104
7,176
1. UK pension risk transfer includes a £nil (H1 21: £925m; H2 21: £nil) Assured Payment Policy (APP).
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5.06 Retail new business
5.06 Retail new business
6 months
6 months
6 months
Full year
30 Jun
30 Jun
31 Dec
31 Dec
2022
2021
2021
2021
£m
£m
£m
£m
Individual annuities
453
483
474
957
Lifetime mortgage loans and retirement interest only mortgages
338
414
434
848
Total Retail Retirement new business
791
897
908
1,805
UK Retail protection
85
105
95
200
UK Group protection
63
55
33
88
US protection1
48
43
48
91
Total Insurance new business
196
203
176
379
Total Retail new business
987
1,100
1,084
2,184
1. In local currency, US protection reflects new business of $62m (H1 21: $59m; H2 21: $65m).
&"Arial"&10&KFF8C00Confidential&1#
5.07 GWP on insurance business
5.07 Gross written premiums on insurance business
6 months
6 months
6 months
Full year
30 Jun
30 Jun
31 Dec
31 Dec
2022
2021
2021
2021
£m
£m
£m
£m
UK Retail protection
740
714
730
1,444
UK Group protection
291
274
131
405
US protection1
574
512
541
1,053
Longevity insurance
154
152
155
307
Total gross written premiums on insurance business
1,759
1,652
1,557
3,209
1. In local currency, US protection reflects gross written premiums of $746m (H1 21: $712m; H2 21: $737m).
&"Arial"&10&KFF8C00Confidential&1#
6.01 SII - Capital position
As at 30 June 2022 the group had a surplus of £9,181m (31 December 2021: £8,185m) over its Solvency Capital Requirement, corresponding to a Solvency II capital coverage ratio of 212% (31 December 2021: 187%). The Solvency II capital position is as follows:
2. Solvency II Own Funds do not include an accrual for the interim dividend of £324m (31 December 2021: £790m) declared after the balance sheet date.
3. Solvency II Own Funds allow for a Risk Margin of £3,782m (2021: £5,488m) and TMTP of £3,291m (2021: £4,736m).
&"Arial"&10&KFF8C00Confidential&1#
6.01 SII - AoC HY22
The table below shows the movement (net of tax) during the six month period ended 30 June 2022 in the group's Solvency II surplus.
6 months
6 months
6 months
30 Jun 2022
30 Jun 2022
30 Jun 2022
Own Funds
SCR
Surplus
£m
£m
£m
Opening Position
17,561
(9,376)
8,185
Operational Surplus Generation1
748
198
946
New business strain
175
(296)
(121)
Net surplus generation
923
(98)
825
Operating variances2
(231)
Market movements3
1,194
M&A, portfolio and business transfers
-
Subordinated liabilities
-
Dividends paid4
(792)
Total surplus movement (after dividends paid in the period)
(187)
1,183
996
Closing Position
17,374
(8,193)
9,181
1. Operational Surplus Generation includes a £176m release of Risk Margin and £(173)m amortisation of the TMTP.
2. Operating variances include the impact of experience variances, changes to valuation assumptions, methodology changes and other management actions including changes in asset mix. The net impact of operating variances over the period was negative and predominantly reflects timing differences which we expect to reverse in H2.
3. Market movements represent the impact of changes in investment market conditions during the period and changes to future economic assumptions. The movement during the period primarily reflects the impact of rising rates on the valuation of the balance sheet, partially offset by weaker asset markets, predominantly in equities, credit spread dispersion in sub-investment grade assets, as well as a number of other, smaller variances.
4. Dividends paid are the amounts from the 2021 final dividend paid in H1 2022.
&"Arial"&10&KFF8C00Confidential&1#
6.01 SII - AoC YE21
The table below shows the movement (net of tax) during the year ended 31 December 2021 in the group's Solvency II surplus.
Full year
Full year
Full year
31 Dec 2021
31 Dec 2021
31 Dec 2021
Own Funds
SCR
Surplus
£m
£m
£m
Opening Position
17,316
(9,880)
7,436
Operational Surplus Generation1
1,144
492
1,636
New business strain
330
(684)
(354)
Net surplus generation
1,474
(192)
1,282
Operating variances2
26
Market movements3
727
M&A, portfolio and business transfers4
77
Subordinated liabilities5
(300)
Dividends paid6
(1,063)
Total surplus movement (after dividends paid in the period)
245
504
749
Closing Position
17,561
(9,376)
8,185
1. Operational Surplus Generation includes a £612m release of Risk Margin and £(433)m amortisation of the TMTP.
2. Operating variances include the impact of experience variances, changes to valuation assumptions, methodology changes and other management actions including changes in asset mix.
3. Market movements represent the impact of changes in investment market conditions over the year and changes to future economic assumptions.
4. Includes the impact of the sale of the Personal Investment business.
5. Reflects the redemption of £300m debt issued in 2009.
6. Dividends paid are the amounts from the 2020 final dividend and the 2021 interim dividend.
&"Arial"&10&KFF8C00Confidential&1#
6.01 SII - Release from op rec.
(d) Reconciliation of IFRS Release from operations to Solvency II Operational surplus generation
(i) The table below provides a reconciliation of the group's IFRS Release from operations to Solvency II Operational surplus generation.
6 months
Full year
2022
2021
£m
£m
IFRS Release from operations
892
1,441
Expected release of IFRS prudential margins
(273)
(496)
Releases of IFRS specific reserves1
(83)
(162)
Solvency II investment margin2,3
67
213
Release of Solvency II Capital Requirement and Risk Margin less TMTP amortisation
343
640
Solvency II Operational surplus generation4
946
1,636
1. Release of prudence from IFRS specific reserves which are not included in Solvency II (e.g. long-term longevity and expense margins).
2. Release of prudence related to differences between the PRA defined Fundamental Spread and Legal & General's best estimate default assumption.
3. Expected market returns earned on LGR's free assets in excess of risk-free rates over 2022.
4. Solvency II Operational Surplus Generation includes management actions which at the start of 2022 were reasonably expected to be implemented over the year.
(ii) The table below provides a reconciliation of the group's IFRS New business surplus to Solvency II New business strain.
6 months
Full year
2022
2021
£m
£m
IFRS New business surplus
153
247
Removal of requirement to set up prudential margins above best estimate on new business
94
280
Set up of SCR on new business
(296)
(684)
Set up of Risk Margin on new business
(72)
(197)
Solvency II New business strain1
(121)
(354)
1. UK PRT new business volume during the first half of 2022 was £3.7bn (Full year 2021: £6.2bn).
&"Arial"&10&KFF8C00Confidential&1#
6.01 SII - IFRS equity rec.
A reconciliation of the group's IFRS equity to Solvency II Own Funds is given below:
30 Jun 2022
31 Dec 2021
£m
£m
IFRS equity1
11,679
10,981
Remove DAC, goodwill and other intangible assets and associated liabilities
(428)
(406)
Add IFRS carrying value of subordinated borrowings2
3,813
3,700
Insurance contract valuation differences3
2,808
4,132
Difference in value of net deferred tax liabilities
(494)
(716)
Other
105
53
Eligibility restrictions
(109)
(183)
Solvency II Own Funds4
17,374
17,561
1. IFRS equity represents equity attributable to owners of the parent and restricted Tier 1 convertible notes as per the Consolidated Balance Sheet.
2. Treated as available capital on the Solvency II balance sheet as the liabilities are subordinate to policyholder claims.
3. Differences in the measurement of technical provisions between IFRS and Solvency II.
4. Solvency II Own Funds do not include an accrual for the interim dividend of £324m (31 December 2021: £790m) declared after the balance sheet date.
&"Arial"&10&KFF8C00Confidential&1#
6.01 SII - Sensitivity analysis
6.01 Group regulatory capital - Solvency II (continued)
(f) Sensitivity analysis The following sensitivities are provided to give an indication of how the group's Solvency II surplus as at 30 June 2022 would have changed in a variety of adverse events. These are all independent stresses to a single risk. In practice, the balance sheet is impacted by combinations of stresses and the combined impact can be larger than adding together the impacts of the same stresses in isolation. It is expected that, particularly for market risks, adverse stresses will happen together.
Impact on
Impact on
Impact on
Impact on
net of tax
net of tax
net of tax
net of tax
Solvency II
Solvency II
Solvency II
Solvency II
capital
coverage
capital
coverage
surplus
ratio
surplus
ratio
2022
2022
2021
2021
£bn
%
£bn
%
50bps increase in risk-free rates1
0.3
9
0.5
10
100bps increase in risk-free rates1
0.5
19
0.9
19
50bps decrease in risk-free rates1,2
(0.3)
(9)
(0.6)
(10)
Credit spreads widen by 100bps assuming an escalating addition to ratings3,4
0.4
12
0.6
13
Credit spreads narrow by 100bps assuming an escalating deduction from ratings3,4
(0.4)
(15)
(0.6)
(14)
Credit spreads widen by 100bps assuming a flat addition to ratings3
0.4
14
0.7
14
Credit spreads of sub investment grade assets widen by 100bps assuming a level addition to ratings3,5
(0.3)
(8)
(0.4)
(7)
Credit migration6
(1.2)
(14)
(0.9)
(10)
25% fall in equity markets7
(0.4)
(3)
(0.5)
(3)
15% fall in property markets8
(0.9)
(9)
(0.8)
(7)
50bps increase in future inflation expectations1
- 0
(3)
- 0
(2)
Substantially reduced Risk Margin9
0.5
7
0.6
7
1. Assuming a recalculation of the Transitional Measure on Technical Provisions that partially offsets the impact on Risk Margin.
2. In the interest rate down stress negative rates are allowed, i.e. there is no floor at zero rates.
3. The spread sensitivity applies to the group's corporate bond (and similar) holdings, with no change in long-term default expectations, post management actions. Restructured lifetime mortgages are excluded as the underlying exposure is mostly to property.
4. The stress for AA bonds is twice that for AAA bonds, for A bonds it is three times, for BBB four times and so on, such that the weighted average spread stress for the portfolio is 100 basis points. To give a 100bps increase on the total portfolio, the spread stress increases in steps of 32bps, i.e. 32bps for AAA, 64bps for AA etc.
5. No stress for bonds rated BBB and above. For bonds rated BB and below the stress is 100bps. The spread widening on the total portfolio is smaller than 2bps as the group holds less than 2% in bonds rated BB and below. The impact is primarily an increase in SCR arising from the modelled cost of trading downgraded bonds back to a higher rating in the stress scenarios in the SCR calculation.
6. Credit migration stress covers the cost of an immediate big letter downgrade on 20% of all assets where the capital treatment depends on a credit rating (including corporate bonds, and sale and leaseback rental strips; lifetime mortgage senior notes are excluded). Downgraded assets in our annuities portfolio are assumed to be traded to their original credit rating, so the impact is primarily a reduction in Own Funds from the loss of value on downgrade. The impact of the sensitivity will depend upon the market levels of spreads at the balance sheet date.
7. This relates primarily to equity exposure in LGC but will also include equity-based mutual funds and other investments that receive an equity stress (for example, certain investments in subsidiaries). Some assets have factors that increase or decrease the stress relative to general equity levels via a beta factor.
8. Assets stressed include residual values from sale and leaseback, the full amount of lifetime mortgages and direct investments treated as property.
9. Assuming a 2/3 reduction in the Risk Margin, allowing for offset from an equivalent reduction in the Transitional Measure on Technical Provisions.
The above sensitivity analysis does not reflect all management actions which could be taken to reduce the impacts. In practice, the group actively manages its asset and liability positions to respond to market movements. Other than in the interest rate and inflation stresses, we have not allowed for the recalculation of TMTP following a stress.
The impacts of these stresses are not linear therefore these results should not be used to interpolate or extrapolate the impact of a smaller or larger stress. The results of these tests are indicative of the market conditions prevailing at the balance sheet date. The results would be different if performed at an alternative reporting date.
&"Arial"&10&KFF8C00Confidential&1#
6.02 SII - New business product
6.02 Estimated Solvency II new business contribution
(a) New business by product1
Management estimates of the present value of new business premium (PVNBP) and the margin for selected lines of business are provided below:
Contribution
Contribution
from new
from new
PVNBP
business2
Margin3
PVNBP
business2
Margin3
6 months
6 months
6 months
Full year
Full year
Full year
2022
2022
2022
2021
2021
2021
£m
£m
%
£m
£m
%
LGRI - UK annuity business
3,715
323
8.7
6,059
574
9.5
Retail Retirement - UK annuity business
453
32
7.1
957
61
6.4
UK protection business
870
50
5.7
1,883
149
7.9
- retail protection
578
28
4.8
1,476
120
8.1
- group protection
292
22
7.5
407
29
7.1
US protection business4
391
42
10.7
842
113
13.4
1. Selected lines of business only.
2. The contribution from new business is defined as the present value at the point of sale of expected future Solvency II surplus emerging from new business written in the year using the risk discount rate applicable at the end of the year.
3. Margin is based on unrounded inputs.
4. In local currency, US protection business reflects PVNBP of $508m (31 December 2021: $1,159m) and a contribution from new business of $54m (31 December 2021: $155m).
The decrease in LGRI margin was driven by the shorter average duration for the schemes written in the first six months of the year, compared to the schemes written in prior year. The increase in Retail Retirement margin is driven by pricing that is focused on both value and volume in light of the lack of growth in the overall retail market. There was also a benefit from the rise in interest rates over the first half of the year. The UK protection contribution from new business is supported by robust volumes, particularly in the group protection business. Retail protection business is impacted by a smaller market (2021 benefitted from a buoyant housing market driven by stamp duty relief) and competitive conditions in 2022. The US protection business margin, whilst still very strong, reduced compared to the prior full year. The decrease is driven by pricing actions and an increase in acquisition expenses.
&"Arial"&10&KFF8C00Confidential&1#
6.02 SII - Assumptions table
30 Jun 2022
31 Dec 2021
%
%
Margin for Risk
4.1
4.1
Risk-free rate
- UK
2.3
0.9
- US
3.0
1.5
Risk discount rate (net of tax)
- UK
6.4
5.0
- US
7.1
5.6
Long-term rate of return on non-profit annuities
4.4
2.5
&"Arial"&10&KFF8C00Confidential&1#
6.02 SII - PVNBP to GWP
6.02 Estimated Solvency II new business contribution (continued)
(d) Reconciliation of PVNBP to gross written premium
A reconciliation of PVNBP and gross written premium is given below:
6 months
Full year
2022
2021
Notes
£bn
£bn
PVNBP
6.02 (a)
5.4
9.7
Effect of capitalisation factor
(0.9)
(2.1)
New business premiums from selected lines
4.5
7.6
Other1
0.9
1.8
Total LGRI and Retail new business
5.05,5.06
5.4
9.4
Annualisation impact of regular premium long-term business
(0.2)
(0.2)
IFRS gross written premiums from existing long-term insurance business
1.8
3.3
Deposit accounting for investment products
(0.4)
(2.1)
Total gross written premiums2
6.6
10.4
1. Other principally includes annuity sales in the US, lifetime mortgage loans and retirement interest only mortgages, and quota share reinsurance premiums.
2. Total gross written premiums includes £55m (2021: £109m) of gross written premiums relating to a residual reinsurance treaty following the disposal of the General Insurance business in 2019.
&"Arial"&10&KFF8C00Confidential&1#
7.01 Investment portfolio
7.01 Investment portfolio
Market
Market
Market
value
value
value
30 Jun
30 Jun
31 Dec
2022
2021
2021
£m
£m
£m
Worldwide total assets under management1
1,295,640
1,333,203
1,426,462
Client and policyholder assets
(1,175,344)
(1,218,560)
(1,309,772)
Investments to which shareholders are directly exposed
120,296
114,643
116,690
1. Worldwide total assets under management include LGIM AUM and other group assets not managed by LGIM.
&"Arial"&10&KFF8C00Confidential&1#
7.01 Investments by inv. class
Analysed by investment class:
Other
Annuity1
LGC2
shareholder
investments
investments
investments
Total
Total
Total
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
31 Dec
2022
2022
2022
2022
2021
2021
Notes
£m
£m
£m
£m
£m
£m
Equities
65
3,071
356
3,492
3,088
3,185
Bonds
7.03
73,174
947
2,693
76,814
82,699
86,803
Derivative assets3
24,832
239
-
25,071
14,019
13,203
Property
7.04
5,632
524
-
6,156
5,103
5,710
Loans4
1,346
377
79
1,802
4,301
2,332
Financial investments
4.03 (a)
105,049
5,158
3,128
113,335
109,210
111,233
Cash and cash equivalents
2,665
1,276
1,032
4,973
3,740
3,596
Other assets5
94
1,894
-
1,988
1,693
1,861
Total investments
107,808
8,328
4,160
120,296
114,643
116,690
1. Annuity investments includes products held within the LGRI and Retail Retirement portfolios including lifetime mortgage loans & retirement interest only mortgages.
2. LGC investments includes £60m (30 June 2021: £52m; 31 December 2021: £54m) of equities that belong to Legal & General Reinsurance Company Limited.
3. Derivative assets are shown gross of derivative liabilities of £28.4bn (30 June 2021: £17.7bn; 31 December 2021: £14.1bn). Exposures arise from use of derivatives for efficient portfolio management, especially the use of interest rate swaps, inflation swaps, credit default swaps and foreign exchange forward contracts for assets and liability management.
4. Loans include reverse repurchase agreements of £1,701m (30 June 2021: £4,152m; 31 December 2021: £2,240m).
5. Other assets include finance leases of £85m (30 June 2021: £87m; 31 December 2021: £86m), associates and joint ventures of £387m (30 June 2021: £314m; 31 December 2021: £375m) and the consolidated net asset value of the group's investments in CALA Homes and other housing businesses.
7.02 DI by asset class
7.02 Direct investments
(a) Total investments analysed by asset class
Direct1
Traded2
Direct1
Traded2
Direct1
Traded2
investments
securities
Total
investments
securities
Total
investments
securities
Total
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
30 Jun
31 Dec
31 Dec
31 Dec
2022
2022
2022
2021
2021
2021
2021
2021
2021
£m
£m
£m
£m
£m
£m
£m
£m
£m
Equities
1,431
2,061
3,492
1,202
1,886
3,088
1,248
1,937
3,185
Bonds3
21,773
55,041
76,814
22,218
60,481
82,699
24,237
62,566
86,803
Derivative assets
-
25,071
25,071
-
14,019
14,019
-
13,203
13,203
Property4
6,156
-
6,156
5,103
-
5,103
5,710
-
5,710
Loans and other receivables
71
1,731
1,802
119
4,182
4,301
63
2,269
2,332
Financial investments
29,431
83,904
113,335
28,642
80,568
109,210
31,258
79,975
111,233
Cash and cash equivalents
116
4,857
4,973
221
3,519
3,740
114
3,482
3,596
Other assets
1,988
-
1,988
1,693
-
1,693
1,861
-
1,861
Total investments
31,535
88,761
120,296
30,556
84,087
114,643
33,233
83,457
116,690
1. Direct investments, which generally constitute an agreement with another party, represent an exposure to untraded and often less volatile asset classes. Direct investments also include physical assets, bilateral loans and private equity, but excluded hedge funds.
2. Traded securities are defined by exclusion. If an instrument is not a direct investment, then it is classed as a traded security.
3. Bonds include lifetime mortgage loans of £5,758m (30 June 2021: £6,325m; 31 December 2021: £6,857m).
4. A further breakdown of property is provided in Note 7.04.
7.02 DI by asset portfolio HY22
7.02 Direct investments (continued)
(b) Direct investments analysed by asset portfolio
Annuity1
Shareholder2
Insurance3
Total
30 Jun
30 Jun
30 Jun
30 Jun
2022
2022
2022
2022
£m
£m
£m
£m
-
Equities
42
1,192
197
1,431
Bonds4
20,498
3
1,272
21,773
Property
5,632
524
-
6,156
Loans and other receivables
-
71
-
71
Financial investments
26,172
1,790
1,469
29,431
Other assets, cash and cash equivalents
94
2,010
-
2,104
Total direct investments
26,266
3,800
1,469
31,535
7.02 DI by asset portfolio HY21
Annuity1
Shareholder2
Insurance3
Total
30 Jun
30 Jun
30 Jun
30 Jun
2021
2021
2021
2021
£m
£m
£m
£m
Equities
9
1,077
116
1,202
Bonds4
21,023
3
1,192
22,218
Property
4,639
464
-
5,103
Loans and other receivables
-
119
-
119
Financial investments
25,671
1,663
1,308
28,642
Other assets, cash and cash equivalents
100
1,814
-
1,914
Total direct investments
25,771
3,477
1,308
30,556
7.02 DI by asset portfolio YE21
Annuity1
Shareholder2
Insurance3
Total
31 Dec
31 Dec
31 Dec
31 Dec
2021
2021
2021
2021
£m
£m
£m
£m
Equities
12
1,124
112
1,248
Bonds4
23,029
3
1,205
24,237
Property
5,286
424
-
5,710
Loans and other receivables
-
63
-
63
Financial investments
28,327
1,614
1,317
31,258
Other assets, cash and cash equivalents
96
1,879
-
1,975
Total direct investments
28,423
3,493
1,317
33,233
1. Annuity investments includes products held within the LGRI and Retail Retirement portfolios including lifetime mortgage loans & retirement interest only mortgages.
2. Shareholder primarily includes the LGC direct investment portfolio along with £60m (30 June 2021: £52m; 31 December 2021: £54m) of equities that belong to other shareholder funds.
3. Insurance primarily includes assets backing the group's US protection business.
4. Bonds include lifetime mortgage loans of £5,758m (30 June 2021: £6,325m; 31 December 2021: £6,857m).
7.03 Bond port. by sector HY22
7.03 Bond portfolio summary
(a) Sectors analysed by credit rating
BB or
AAA
AA
A
BBB
below
Other
Total2
Total2
As at 30 June 2022
£m
£m
£m
£m
£m
£m
£m
%
Sovereigns, Supras and Sub-Sovereigns
1,696
8,049
1,169
294
11
1
11,220
15
Banks:
- Tier 2 and other subordinated
-
-
68
52
3
1
124
-
- Senior
-
1,336
2,336
942
1
-
4,615
6
- Covered
120
-
-
-
-
-
120
-
Financial Services:
- Tier 2 and other subordinated
-
118
50
32
-
17
217
-
- Senior
51
307
439
368
-
-
1,165
2
Insurance:
- Tier 2 and other subordinated
59
175
32
51
-
-
317
-
- Senior
5
166
416
462
-
-
1,049
1
Consumer Services and Goods:
- Cyclical
-
39
1,360
1,877
159
3
3,438
4
- Non-cyclical
323
880
2,531
3,732
247
-
7,713
10
- Health care
-
608
808
761
4
-
2,181
3
Infrastructure:
- Social
184
891
3,660
882
79
-
5,696
7
- Economic
273
173
891
3,744
180
-
5,261
7
Technology and Telecoms
141
325
1,546
2,801
20
1
4,834
6
Industrials
-
52
613
659
29
-
1,353
2
Utilities
386
628
4,711
5,523
28
-
11,276
15
Energy
-
-
331
765
16
-
1,112
1
Commodities
-
-
337
781
25
8
1,151
2
Oil and Gas
-
505
873
316
226
24
1,944
3
Real estate
-
23
1,906
1,677
107
-
3,713
5
Structured finance ABS / RMBS / CMBS / Other
539
771
463
695
30
-
2,498
3
Lifetime mortgage loans1
3,721
1,146
497
381
-
13
5,758
8
CDOs
-
47
-
12
-
-
59
-
Total £m
7,498
16,239
25,037
26,807
1,165
68
76,814
100
Total %
10
21
33
35
1
-
100
1. The credit ratings attributed to lifetime mortgage loans are allocated in accordance with the internal Matching Adjustment structuring. 2. The group's bond portfolio is dominated by investments backing LGRI's and Retail Retirement's annuity business. These account for £73,174m, representing 95% of the total group portfolio.
7.03 Bond port. by sector HY21
7.03 Bond portfolio summary (continued)
(a) Sectors analysed by credit rating (continued)
BB or
AAA
AA
A
BBB
below
Other
Total2
Total2
As at 30 June 2021
£m
£m
£m
£m
£m
£m
£m
%
Sovereigns, Supras and Sub-Sovereigns
1,925
10,091
1,249
335
10
-
13,610
17
Banks:
- Tier 2 and other subordinated
-
-
58
39
4
-
101
-
- Senior
-
1,024
3,490
790
2
-
5,306
6
- Covered
151
-
-
-
-
-
151
-
Financial Services:
- Tier 2 and other subordinated
-
113
57
21
-
-
191
-
- Senior
55
443
406
393
9
-
1,306
2
Insurance:
- Tier 2 and other subordinated
64
196
31
58
-
-
349
-
- Senior
-
221
405
542
-
-
1,168
1
Consumer Services and Goods:
-
-
-
- Cyclical
-
84
1,135
1,772
193
-
3,184
4
- Non-cyclical
338
1,052
2,658
3,936
344
-
8,328
10
- Health care
-
605
851
690
5
-
2,151
3
Infrastructure:
- Social
208
746
4,669
916
77
-
6,616
8
- Economic
311
51
766
4,053
183
-
5,364
6
Technology and Telecoms
174
209
1,462
3,085
22
1
4,953
6
Industrials
-
31
672
694
22
-
1,419
2
Utilities
-
207
5,629
5,861
27
-
11,724
14
Energy
-
-
468
589
16
-
1,073
1
Commodities
-
-
365
910
8
-
1,283
2
Oil and Gas
-
560
1,047
389
274
-
2,270
3
Real estate
-
11
1,728
1,591
177
-
3,507
4
Structured finance ABS / RMBS / CMBS / Other
423
798
403
603
24
1
2,252
3
Lifetime mortgage loans1
3,852
1,509
524
427
-
13
6,325
8
CDOs
-
55
-
13
-
-
68
-
Total £m
7,501
18,006
28,073
27,707
1,397
15
82,699
100
Total %
9
22
34
33
2
-
100
1. The credit ratings attributed to lifetime mortgage loans are allocated in accordance with the internal Matching Adjustment structuring.
2. The group's bond portfolio is dominated by investments backing LGRI's and Retail Retirement's annuity business. These account for £78,226m, representing 95% of the total group portfolio.
7.03 Bond port. by sector YE21
7.03 Bond portfolio summary (continued)
(a) Sectors analysed by credit rating (continued)
BB or
AAA
AA
A
BBB
below
Other
Total2
Total2
As at 31 December 2021
£m
£m
£m
£m
£m
£m
£m
%
Sovereigns, Supras and Sub-Sovereigns
2,008
10,348
1,302
360
9
-
14,027
16
Banks:
- Tier 2 and other subordinated
-
-
56
36
3
-
95
-
- Senior
95
1,858
3,998
738
1
-
6,690
8
- Covered
138
-
-
-
-
-
138
-
Financial Services:
- Tier 2 and other subordinated
-
111
60
72
-
8
251
-
- Senior
57
416
422
315
-
-
1,210
1
Insurance:
- Tier 2 and other subordinated
61
192
32
62
-
-
347
-
- Senior
4
196
460
535
-
-
1,195
1
Consumer Services and Goods:
- Cyclical
-
33
1,399
1,760
206
-
3,398
4
- Non-cyclical
350
1,003
2,737
3,836
346
-
8,272
10
- Health care
-
690
837
889
5
-
2,421
3
Infrastructure:
- Social
215
780
5,001
900
79
-
6,975
8
- Economic
303
50
1,121
4,294
191
-
5,959
7
Technology and Telecoms
177
307
1,530
3,024
22
2
5,062
6
Industrials
-
31
688
558
30
-
1,307
2
Utilities
27
206
5,666
5,947
30
-
11,876
14
Energy
-
-
385
840
16
-
1,241
1
Commodities
-
-
365
889
8
-
1,262
1
Oil and Gas
-
546
971
387
271
-
2,175
3
Real estate
-
16
1,802
1,587
122
-
3,527
4
Structured finance ABS / RMBS / CMBS / Other
450
860
445
668
28
-
2,451
3
Lifetime mortgage loans1
4,238
1,550
584
470
-
15
6,857
8
CDOs
-
-
54
13
-
-
67
-
Total £m
8,123
19,193
29,915
28,180
1,367
25
86,803
100
Total %
9
22
35
32
2
-
100
1. The credit ratings attributed to lifetime mortgage loans are allocated in accordance with the internal Matching Adjustment structuring. 2. The group's bond portfolio is dominated by investments backing LGRI's and Retail Retirement's annuity business. These account for £81,812m, representing 94% of the total group portfolio.
7.03 Bond port. by dom. HY22
7.03 Bond portfolio summary (continued)
(b) Sectors analysed by domicile
Rest of
UK
US
EU
the World
Total
As at 30 June 2022
£m
£m
£m
£m
£m
Sovereigns, Supras and Sub-Sovereigns
7,685
1,774
768
993
11,220
Banks
1,514
1,849
812
684
4,859
Financial Services
341
403
380
258
1,382
Insurance
101
1,131
19
115
1,366
Consumer Services and Goods:
- Cyclical
473
2,299
395
271
3,438
- Non-cyclical
1,888
5,311
354
160
7,713
- Health care
275
1,842
63
1
2,181
Infrastructure:
- Social
4,965
524
158
49
5,696
- Economic
3,711
881
264
405
5,261
Technology and Telecoms
403
3,080
699
652
4,834
Industrials
189
799
313
52
1,353
Utilities
6,303
2,583
1,877
513
11,276
Energy
312
633
1
166
1,112
Commodities
37
449
151
514
1,151
Oil and Gas
167
567
686
524
1,944
Real estate
1,938
934
544
297
3,713
Structured Finance ABS / RMBS / CMBS / Other
704
1,503
11
280
2,498
Lifetime mortgage loans
5,758
-
-
-
5,758
CDOs
-
-
-
59
59
Total
36,764
26,562
7,495
5,993
76,814
7.03 Bond port. by dom. HY21
7.03 Bond portfolio summary (continued)
(b) Sectors analysed by domicile (continued)
Rest of
UK
US
EU
the World
Total
As at 30 June 2021
£m
£m
£m
£m
£m
Sovereigns, Supras and Sub-Sovereigns
9,937
1,900
861
912
13,610
Banks
1,807
1,828
1,241
682
5,558
Financial Services
532
344
555
66
1,497
Insurance
103
1,239
60
115
1,517
Consumer Services and Goods:
- Cyclical
446
2,088
503
147
3,184
- Non-cyclical
1,952
5,822
382
172
8,328
- Health care
285
1,785
80
1
2,151
Infrastructure:
- Social
5,826
582
160
48
6,616
- Economic
3,941
847
226
350
5,364
Technology and Telecoms
407
2,981
707
858
4,953
Industrials
186
815
351
67
1,419
Utilities
6,834
2,230
2,075
585
11,724
Energy
229
622
96
126
1,073
Commodities
6
564
183
530
1,283
Oil and Gas
213
634
792
631
2,270
Real estate
2,089
562
620
236
3,507
Structured Finance ABS / RMBS / CMBS / Other
919
1,237
11
85
2,252
Lifetime mortgage loans
6,325
-
-
-
6,325
CDOs
-
-
-
68
68
Total
42,037
26,080
8,903
5,679
82,699
7.03 Bond port. by dom. YE21
7.03 Bond portfolio summary (continued)
(b) Sectors analysed by domicile (continued)
Rest of
UK
US
EU
the World
Total
As at 31 December 2021
£m
£m
£m
£m
£m
Sovereigns, Supras and Sub-Sovereigns
9,829
1,892
1,244
1,062
14,027
Banks
2,253
1,799
1,956
915
6,923
Financial Services
425
429
517
90
1,461
Insurance
113
1,291
15
123
1,542
Consumer Services and Goods
- Cyclical
473
2,213
442
270
3,398
- Non-cyclical
1,879
5,828
391
174
8,272
- Health care
284
2,054
82
1
2,421
Infrastructure
- Social
6,141
628
154
52
6,975
- Economic
4,348
902
309
400
5,959
Technology and Telecoms
412
3,025
782
843
5,062
Industrials
190
681
354
82
1,307
Utilities
6,963
2,158
2,217
538
11,876
Energy
415
667
1
158
1,241
Commodities
20
537
175
530
1,262
Oil and Gas
196
626
785
568
2,175
Real estate
1,895
734
602
296
3,527
Structured finance ABS / RMBS / CMBS / Other
861
1,395
10
185
2,451
Lifetime mortgage loans
6,857
-
-
-
6,857
CDOs
-
-
-
67
67
Total
43,554
26,859
10,036
6,354
86,803
7.03 Bond port. credit rating
7.03 Bond portfolio summary (continued)
(c) Bond portfolio analysed by credit rating
Externally
Internally
rated
rated1
Total
As at 30 June 2022
£m
£m
£m
AAA
3,449
4,049
7,498
AA
13,439
2,800
16,239
A
17,049
7,988
25,037
BBB
19,723
7,084
26,807
BB or below
777
388
1,165
Other
19
49
68
Total
54,456
22,358
76,814
Externally
Internally
rated
rated1
Total
As at 30 June 2021
£m
£m
£m
AAA
3,254
4,247
7,501
AA
14,732
3,274
18,006
A
20,595
7,478
28,073
BBB
21,462
6,245
27,707
BB or below
970
427
1,397
Other
1
14
15
Total
61,014
21,685
82,699
Externally
Internally
rated
rated1
Total
As at 31 December 2021
£m
£m
£m
AAA
3,506
4,617
8,123
AA
15,544
3,649
19,193
A
21,240
8,675
29,915
BBB
20,715
7,465
28,180
BB or below
950
417
1,367
Other
10
15
25
Total
61,965
24,838
86,803
1. Where external ratings are not available an internal rating has been used where practicable to do so.
7.03 Bond port. DI & trad. HY22
7.03 Bond portfolio summary (continued)
(d) Sectors analysed by Direct investments and Traded securities
Direct
Traded
investments
securities
Total
As at 30 June 2022
£m
£m
£m
Sovereigns, Supras and Sub-Sovereigns
747
10,473
11,220
Banks
742
4,117
4,859
Financial Services
507
875
1,382
Insurance
116
1,250
1,366
Consumer Services and Goods:
- Cyclical
579
2,859
3,438
- Non-cyclical
489
7,224
7,713
- Health care
283
1,898
2,181
Infrastructure:
- Social
2,953
2,743
5,696
- Economic
3,762
1,499
5,261
Technology and Telecoms
192
4,642
4,834
Industrials
99
1,254
1,353
Utilities
1,679
9,597
11,276
Energy
368
744
1,112
Commodities
70
1,081
1,151
Oil and Gas
61
1,883
1,944
Real estate
2,287
1,426
3,713
Structured Finance ABS / RMBS / CMBS / Other
1,081
1,417
2,498
Lifetime mortgage loans
5,758
-
5,758
CDOs
-
59
59
Total
21,773
55,041
76,814
7.03 Bond port. DI & trad. HY21
7.03 Bond portfolio summary (continued)
(d) Sectors analysed by Direct investments and Traded securities (continued)
Direct
Traded
investments
securities
Total
As at 30 June 2021
£m
£m
£m
Sovereigns, Supras and Sub-Sovereigns
991
12,619
13,610
Banks
628
4,930
5,558
Financial Services
396
1,101
1,497
Insurance
162
1,355
1,517
Consumer Services and Goods:
- Cyclical
469
2,715
3,184
- Non-cyclical
386
7,942
8,328
- Health care
339
1,812
2,151
Infrastructure:
- Social
3,507
3,109
6,616
- Economic
3,696
1,668
5,364
Technology and Telecoms
129
4,824
4,953
Industrials
58
1,361
1,419
Utilities
1,656
10,068
11,724
Energy
331
742
1,073
Commodities
57
1,226
1,283
Oil and Gas
57
2,213
2,270
Real estate
2,109
1,398
3,507
Structured Finance ABS / RMBS / CMBS / Other
925
1,327
2,252
Lifetime mortgage loans
6,325
-
6,325
CDOs
-
68
68
Total
22,221
60,478
82,699
7.03 Bond port. DI & trad. YE21
7.03 Bond portfolio summary (continued)
(d) Sectors analysed by Direct investments and Traded securities (continued)
Direct
Traded
investments
securities
Total
As at 31 December 2021
£m
£m
£m
Sovereigns, Supras and Sub-Sovereigns
1,037
12,990
14,027
Banks
665
6,258
6,923
Financial Services
432
1,029
1,461
Insurance
119
1,423
1,542
Consumer Services and Goods:
- Cyclical
498
2,900
3,398
- Non-cyclical
512
7,760
8,272
- Health care
357
2,064
2,421
Infrastructure:
- Social
3,699
3,276
6,975
- Economic
4,267
1,692
5,959
Technology and Telecoms
153
4,909
5,062
Industrials
60
1,247
1,307
Utilities
1,883
9,993
11,876
Energy
475
766
1,241
Commodities
55
1,207
1,262
Oil and Gas
56
2,119
2,175
Real estate
2,091
1,436
3,527
Structured Finance ABS / RMBS / CMBS / Other
1,021
1,430
2,451
Lifetime mortgage loans
6,857
-
6,857
CDOs
-
67
67
Total
24,237
62,566
86,803
7.04 Property analysis
7.04 Property analysis
Property exposure within Direct investments by status
Annuity1
Shareholder2
Total
As at 30 June 2022
£m
£m
£m
%
Fully let
5,190
-
5,190
84
Development
442
403
845
14
Land
-
121
121
2
Total
5,632
524
6,156
100
Annuity1
Shareholder2
Total
As at 30 June 2021
£m
£m
£m
%
Fully let
4,035
-
4,035
79
Development
604
323
927
18
Land
-
141
141
3
Total
4,639
464
5,103
100
Annuity1
Shareholder2
Total
As at 31 December 2021
£m
£m
£m
%
Fully let
4,746
-
4,746
83
Development
540
293
833
15
Land
-
131
131
2
Total
5,286
424
5,710
100
1. The fully let annuity property exposure includes £4.9bn (30 June 2021: £4.0bn; 31 December 2021: £4.5bn) let to investment grade tenants.
2. The above analysis does not include assets related to the group's investments in CALA Homes and other housing businesses, which are accounted for as inventory within Receivables and other assets on the group's Consolidated Balance Sheet and measured at the lower of cost and net realisable value. At 30 June 2022 the group held a total of £2,072m (30 June 2021: £2,190m; 31 December 2021: £2,044m) of such assets.
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Legal & General Group plc published this content on 09 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2022 07:55:03 UTC.
Legal & General Plc specializes in savings management. The group's activity is organized around 4 lines of business:
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