Legal & General (L&G) and Just Group have published their interim results for the first half of 2023 - both revealing strong growth in pensions risk transfer business.
L&G's half-year results for the six months to 30 June 2023 revealed it had seen a slight fall in operating profits, down from £958m in the first half of 2022 to £941m in the first six months of this year.
Despite this, L&G said its institutional retirement business, LGRI, posted an increase in operating profit of 19% - from £395m in the first half of last year to £471m in the six months to 30 June this year.
It said the rise in profits was underpinned by the growing scale of its backbook earnings as well as the consistent investment performance of its annuity portfolio.
L&G said LGRI wrote a total of £4.992bn of global pension risk transfer (PRT) business during the first half of 2023 - up from £4.449m in the same period last year. It said its first half new business margin on a Solvency II basis was 8.0%, in line with its long-term average.
The firm added the second half of 2023 had started well - with £1.8bn of UK PRT and $1bn (£790m) of US PRT completed to date.
L&G said its investment management business, LGIM, delivered operating profit of £142m in the first half of 2023, down from £200m in the same period last year - a reduction in profitability it said primarily reflected the impact of rising interest rates on assets under management, which it said decreased by £132bn to £1,158bn over the first six months of the year and were down from £1.290bn at 30 June last year.
L&G group chief executive Sir Nigel Wilson said the firm remained "on track" to achieve its five-year ambitions and deliver attractive returns for its shareholders.
He said: "In H1, we delivered £0.95bn of both IFRS operating profit and capital generation, together with a Solvency II ratio of 230% and a surplus of £9.2bn. The dividend is up by 5%. LGRI and Legal & General Capital performed strongly, LGIM results stabilised, and retail's performance - while impacted by competition in some areas - was bolstered by growing annuity sales and progress in US protection.
"We wrote £4.9bn of UK PRT, deploying just £106m of capital, underlining the benefits of our synergistic business model. I'd like to thank my colleagues for their contribution and ongoing commitment to inclusive capitalism, serving our shareholders, customers and wider society."
In its interim results for the six months ended 30 June 2023, Just Group revealed a 154% rise in underlying operating profit from £68m in the first half of last year to £173m in the six months to 30 June this year - growth it said was driven by significantly higher new business profits.
Just Group chief executive David Richardson said its defined benefit (DB) business had, in particular, gone from "strength to strength" - noting that, during the first six months of the year, Just completed 35 transactions of which 32 were less than £100m and 22 were less than £10m.
It said it had, during the period, written both its largest (£513m) and smallest (£0.6m) deals to date, and had a sizeable ongoing pipeline of new business opportunities for the second half of the year.
It said its bulk quotation service continued to grow in popularity - with over 200 schemes from 19 employee benefit consultants now onboarded. It added this service was now providing a steady source of smaller deal completions as consultants and trustees increasingly benefit from regular insurer price monitoring and a streamlined transaction process.
Richardson added: "As well as expanding our leadership position in the smaller transaction size segment, we will also drive growth by securing a greater number of larger transactions.
"We have written almost 350 DB transactions since entering the market in 2013 and through these, have gained significant pricing and deal experience to now regularly quote on larger transactions. Our participation in the larger transaction segment is supported by the flexibility provided by our stronger capital position and our expanded panel of reinsurance partners."
He added: "Combined with the strong outlook for the market in 2023, we expect our participation in the larger deal segment to increase further."