LEGAL & General has increased its payout on 25-year with-profits
policies by about 3%, while maintaining it on 10-year policies.
The group's results for 1993 show a jump in profits from #116m to
#181m, on the back of a recovery from losses to profits of the general
insurance side. Dividends are raised by 5.2% to 20.1p, after a final of
13.6p.
The life and pensions division was marginally ahead at #151.5m after
unstated provisions against the costs of correcting poor pensions advice
given by L&G agents.
The group says it will compensate any investor who has suffered losses
as a result of poor advice from its salesforce. It has taken in some
#500m of pension transfer business, but chief executive David Prosser
considers the scale of the poor advice scandal which has hit the
industry has been exaggerated.
The group is not revealing the extent of the provisions, nor the cost
of changing its systems to meet the new commissions disclosure regime.
Direct attributable costs of regulation is running at #10m a year.
The group supports the Personal Investment Authority as the ''only
sensible way forward for regulatory standards in the short-term''. Mr
Prosser sees some refinement being necessary to the PIA proposals, but
considers them a step forward.
The group, as a whole, has been cutting costs, while aiming to improve
customer service. Separation of the sales and marketing functions from
customer services is paying off and productivity of the latter has risen
by 10%.
General insurance recovered from losses of #61m to #27.3m, reflecting
the general recovery in the industry. It has been refocused on marketing
personal lines, single policy cover for small businesses and commercial
property.
The shares responded with an 8p rise to 510p.
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