Legal & General hikes divi a whopping 24%

Just two years ago Legal & General was fending off market perceptions that it was heading for the dustbin. Today the insurer roared back with £1 billion in annual profits and a leap in the dividend.

The results - a triumph for chief executive Tim Breedon - come on the back of rising sales of pensions and other savings products as prudent Britons try to plan for the future.

The general insurance arm took a loss of £8 million after the harsh winter caused a spike in household claims.

The life insurance business more than made up for that, with Breedon saying he "confident about the growth prospects for L&G".

Unveiling a 25% increase in the final dividend payment to 4.75p, he said Legal will be "a growing force as the welfare state retrenches and individuals increasingly look to high-quality, good value risk, savings and investment provision".

In 2009 as the banks continued unravelled, investors were fearful that insurers would follow.
In particular, L&G was a cause of great alarm, as some bet that it was under capitalised. Breedon came under strong criticism for failing to offer enough reassurance.

Group sales are up 28% to £1.8 billion.