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“Legal & General” Announces $6.5 Billion Return to Investors as Part of Strategic Transformation Plan
British company “Legal & General” has announced plans to return $6.5 billion to investors over the next three years through share buybacks and dividend distributions, aiming to boost confidence in its strategic transformation and growth plans, according to a report published by Reuters.
Since Antonio Simões took over as CEO in 2023, the company has implemented a series of significant changes. It sold its U.S. protection business for $2.3 billion, and also sold the “CALA” construction group in the UK for £1.35 billion. These moves reflect the company’s increasing focus on its core activities and its shift toward simplifying operations.
Financial Performance and Future Outlook
Despite a 2% drop in the company’s stock following the results announcement, the stock has risen 6% since the beginning of the year. Operating profit increased to £1.62 billion in 2024, up from £1.53 billion in 2023, reflecting steady growth.
The company expects sustainable growth in the “bulk annuities” market, with pension insurance deals in the UK totaling £45 billion in 2024, and forecasts deals reaching £50 billion in 2025.
The Company’s Future Strategy
Antonio Simões confirmed that “Legal & General’s” strategy aims to build a simpler, stronger entity in the long term. He added, “What matters is continuing to execute day by day until the market recognizes the value of what we’re doing.”
Background on “Legal & General” Amid Market Shifts
Founded in 1836 by six lawyers in London, “Legal & General” has since become one of the largest financial services companies in the UK, offering a wide range of products including life insurance, pensions, and investment management.
In 2014, UK insurance companies faced significant challenges such as intense competition, pricing pressures, and changing customer needs. These challenges forced local companies to confront threats from customers moving toward global markets. Additionally, insurance companies in London are facing challenges related to globalization, the connected economy, and cost-based competition, which threatens their historic role in the market.
Sources:
- Reuters report
- “Legal & General” financial results
- UK market data