Bulk annuities boost Legal & General

The changes made in last year's Budget to give pensioners greater freedom over how to invest their pension funds inevitably hit the individual annuity market, and sales of individual annuities more than halved to £600m. However, this was more than offset by an increase in bulk annuity sales, whereby the insurer takes on the liabilities of a defined-benefit scheme. These more than doubled to £6bn after the group completed two large transactions. Crucially, annuity assets grew by 28 per cent to £44.2bn, which helped lift operating profits from annuities by more than a third to £428m.

In the mortgage protection business - which covers one in six of all UK mortgages - gross premiums rose by 7 per cent to £1.1bn. As the sole provider to about 85 per cent of UK building societies, L&G retains a strong position in this market. Premiums were also stronger for general insurance business, although a £12m weather-related hit pulled the combined ratio (of claims to premiums) up from 84 per cent to 87 per cent.

Prior to these numbers, JPMorgan Cazenove was forecasting adjusted EPS of 17.98p for 2015 and year-end embedded value of 183p a share.