L&G cashes in on investor confidence

RENEWED confidence among small investors has boosted sales for insurer Legal & General.

The group said new business volumes for the second quarter were 27% higher than a year earlier, adding its outlook appeared 'encouraging' as individual investors return to bonds and equities for long-term savings. A recovery in the UK stock market throughout 2003 appears to have bolstered confidence.

However, the extra costs of its annuity holders living longer dented earnings - half-year operating profits fell to £292m from £365m.

Legal & General was boosted by a rise in its new life and pensions business, which increased by 20% to £339m in the first half.

Chief executive David Prosser said: 'Legal & General is one of the strongest companies in the sector and is well positioned to benefit from the opportunities the market offers.

'We have had a good first six months - we believe that once again we have taken market share profitably and we expect to continue to do so.'

L&G has 4.5m customers and employs more than 8,800 staff.

It has been benefiting from the strength of its distribution network, which has seen the company sell its savings products through a series of alliances with banks including Sainsbury's.

The shares, which peaked at more than 200p in 1999 during the stock market bubble, had risen 1 3/4p to 98 1/2p by 1.30pm.