Despite a weak housing market, L&G said that its growth in the mortgage market had lead to stable volumes of housing-related protection and general insurance sales.
In its results to the end of June 2011, L&G’s housing and protection business reported a 14% increase in operating cash flow to £121m, compared to £106m in H1 2010.
In individual protection, new business sales rose to £65m in H1 compared to £57m the year before, taking gross premiums to £447m, up 3% on last year. General insurance returned operating profit of £17m, up from £14m in H1 last year.
However, L&G’s risk division, under which housing and protection fall alongside annuities, saw its pre-tax operating profit fall to £236m in H1, down from £310m for the same period of 2010.
L&G said this was a result of reduced new business in annuities and higher than expected claims in its group protection business.
Overall, the group revealed a better than expected pre-tax operating profit of £523m for the six months to June 2011, down from £542m a year earlier.
Analysts had expected a £508m profit, but L&G’s profits were boosted by the strong performance of its investment and international divisions.
Tim Breedon, group chief executive at L&G, said: “We remain confident in our business model and strategy. Our leading market positions in UK savings, annuities, protection and asset management are delivering healthy returns for shareholders.
“Sales volumes continue to grow, and we are developing attractive new businesses both in the UK and internationally.”
