New Legal & General chief executive promises ‘fresh perspective’

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Legal & General’s new chief executive António Simões has promised to take a “fresh perspective” on the FTSE 100 insurer and asset manager, as he presented his first set of results since taking the job in January.

Announcing the group’s 2023 results on Wednesday, Simões said the business had “demonstrated resilience in challenging markets to achieve record new business volumes” in corporate pension deals, UK annuities and US protection products. L&G posted an operating profit of £1.7bn, broadly flat on the previous year but below analysts’ consensus estimates.

A wave of corporate pension deals, in which the insurer takes over the assets and liabilities of company schemes, lifted the retirement division, while the retail business dimmed slightly due to a lower contribution from fintech investments amid a tougher market. L&G’s balance-sheet investment unit was flat in what it called a “challenging macroeconomic environment for alternative assets”.

“This is the right moment to take a fresh perspective, build on our track record and set out a vision for profitable and sustainable growth,” said Simões, who will lay out his strategy for the group in June.

The company’s Solvency II coverage ratio, the amount of regulatory capital it holds as a percentage of the minimum required, sat at 224 per cent at the year end, above consensus estimates of 217 per cent, while the dividend was in line with expectations.

The company said it had “considerable opportunities available to deliver attractive returns to shareholders by retaining and investing capital within the group” but added it would consider these against the merits of returning capital to shareholders.

Simões, who joined the business from Santander, replaced L&G’s chief of more than a decade, Sir Nigel Wilson. Investors are anticipating his strategy.

“We believe there is scope for new CEO António Simões to increase the capital return to shareholders either via higher [dividend per share] growth . . . or share buybacks,” Berenberg analysts said in a note in January.