Weaker Isa sales setback for L&G

LEGAL & General today admitted it had not fared as well as hoped in this year's Isa season as it disappointed the City by reporting a fall in new business volumes.

The life assurer blamed the shockwaves from the Madrid bomb blast last month for sapping consumer confidence in personal savings.

New business volumes fell 4% to £215m on the industry standard annual premium equivalent basis, below consenus expectations and in marked contrast to a bullish report by Prudential last week.

Chief executive David Prosser insisted the group was on track to grow market share this year, and that consumer confidence was improving as stock markets stabilised.

He added most of the fall was down to lower sales of corporate investment products, particularly bulk annuities where insurers take on the liabilities of a company pension scheme.

'In UK group business, the quarter-on-quarter comparisons are distorted by large single payments for bulk purchase annuities, where we have maintained a firm underwriting approach,' he said.

But analysts said that they had expected the company's Isa sales, only £200,000 ahead at £18m, to be stronger given L&G's slew of distribution tie-ups with banks such as Barclays.

L&G's shares dipped by 1 3/4p to 95 1/4p.