Blog: Breakingviews – L&G looks overseas to fight Brexit discount – Reuters

LONDON, March 8 (Reuters Breakingviews) – Post-Brexit Britain has yet to offer a happy home to its insurers. Despite hopes that the government could slash red tape and relax regulatory constraints after leaving the European Union, UK insurers are still haunted by a discount to European peers, bogged down by the country’s sluggish economy. That’s doubly true for $19 billion Legal & General (LGEN.L).

The group led by Nigel Wilson, who is due to step down after 11 years at the helm once a successor has been found, trades at just 7 times its 2023 earnings, well below Generali’s (GASI.MI) and Allianz’s (ALVG.DE) 9 times, according to Refinitiv data, and also behind UK rivals like Aviva (AV.L). That’s partly due to its concentration in the life sector – Wilson sold out of general insurance in 2020. Still, full-year results on Wednesday were encouraging: shareholders will be rewarded with a 5% dividend boost after L&G’s operating profit rose 12% to 2.5 billion pounds, helped by changes in mortality assumptions.

An overseas expansion may help. L&G’s investment management unit has benefited from an international drive, with non-UK assets accounting for 43% of new money last year. On the life insurance side, some 39% of L&G’s gross premiums were booked overseas in 2022, with the U.S. a particular focus for Brexit-backing Wilson. The less L&G looks like a British company, the more attractive it will be to shareholders. (By Pamela Barbaglia)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

Editing by Neil Unmack and Oliver Taslic

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