The U.K.’s largest manager of pension assets said Tuesday that operating profit rose 3.6 percent from a year earlier to 777 million pounds ($1 billion). That missed the 812 million-pound average estimate of 18 analysts surveyed by L&G. The insurer declared an interim dividend of 4 pence per share, based on a new formula of 30 percent of the prior year’s payout.
The shares were down 6.1 percent to 204.7 pence by 9:55 a.m. in London, falling for the first time in five days. L&G led a sell-off among insurers after Britain’s decision to leave the European Union raised concerns that the industry’s $2.6 trillion of investments would fall in value. The stock has dropped 13 percent since the referendum on June 23.
“There are a lot of different things going on in the world that people find difficult to interpret,” Chief Executive Officer Nigel Wilson said in a Bloomberg Television interview with Guy Johnson and Caroline Hyde. Our shares “seem to respond to any type of noise and we’re such a bellwether for the economy,” he added.
Operating profit at the insurance unit dropped 26 percent to 138 million pounds after a lower-than-expected release of cash from its life-protection business and as L&G contributed 9 million pounds to the Flood Re levy. Profit at the investment unit fell 3 percent to 171 million pounds, as property deals dropped.
Sales generated from corporate bulk annuity transactions and lifetime mortgages helped buffer the earnings results. The insurer’s Solvency II ratio was 158 percent, based on a capital surplus of 5.3 billion pounds. That’s up from an estimated ratio of 156 percent on June 28.
U.K. competitor Standard Life Plc also reported results Tuesday, posting an 18 percent increase in operating profit to 341 million pounds and a 7.5 percent increase in interim dividend to 6.47 pence per share, according to a statement. Both figures beat analyst forecasts supplied by Standard Life.