Legal & General (LGEN) is to sell its general insurance business to Allianz in the second half of 2019, in a move that the investment manager said will allow it to boost its solvency ratios and provide further capital to invest in growth elsewhere.
The household insurance division has shown few signs of profitable growth of late. Although written gross premiums rose 11 per cent to £410m in 2018, it failed to turn an operating profit, and is being sold to Allianz for a base price of £242m, equal to its carrying value.
Chief executive Nigel Wilson described the sale as “the right decision” for shareholders, and the two million customers which will now move to the German financial services giant.
Consensus forecasts are for earnings of 32.8p per share in 2019, falling to 31.4p in 2020.
