Strong demand, particularly in the remortgage market, helped to boost business, the L&G group’s financial results stated.
It said it remained the largest business in the UK intermediated mortgage market was involved in a fifth of all transactions in the country.
Its surveying services arm facilitated more than 512,000 surveys and valuations over the year, slightly down on the previous year’s 528,000.
Lifetime mortgage market challenges
Lifetime mortgage advances, including retail interest-only mortgages, came to £632m, a drop on £848m the year before.
L&G said it maintained pricing and underwriting discipline as interest rates rose.
It said the lifetime mortgage market in the UK still presented a “sizeable opportunity” with equity amounts held by the over 55s now at £2.6trn, and £6bn being released. However, L&G said it expected the market in 2023 to be challenging due to interest rates so plans to remain disciplined on pricing.
Its UK retail protection business generated a gross premium income of £1.48bn, up from £1.44bn the year before. New business annual premiums came to £171m, compared to £200m in 2021. It said 2021 benefitted from a “buoyant housing market” and noted that the market was smaller in 2022.
L&G said it had a market share of 23 per cent.
Its retail business, which comprises retail annuity and drawdown products, workplace savings and lifetime mortgages, contributed an operating profit of £825m up from £620m. It saw a profit before tax of £1.64bn, up from £780m.
Investment in fintech
L&G said it continued to invest in and scale up adjacent fintech businesses. It said its 49 per cent holding in Smartr365 continued to build scale and completed a successful funding round in 2022. It now has 3,300 users on the platform.
It described its investment in alternative lender Generation Home as “important” to its presence in the mortgage market.
The wider group reported a 12 per cent increase in its operating profit to £2.52bn, while its profit after tax also rose by 12 per cent to £2.29bn.
Nigel Wilson, group chief executive of L&G, said: “We have delivered another strong result in 2022, ahead of market expectations. Our diversified and highly synergistic business model continues to deliver significant benefits.
“At a time when many households are being affected by the rising cost of living, our commitment to inclusive capitalism is more important than ever to help improve the lives of our customers, build a better society for the long-term and create value for our shareholders.”
L&G said it was undergoing a “rigorous process” to find a replacement for Wilson, who announced his retirement from the business in January. Wilson joined L&G as chief financial officer in 2009 before moving up to chief executive in 2012.
He has decided to retire from executive life and until a successor is appointed, Wilson will continue to focus on the group’s strategy.
