A.M. Best Affirms Ratings of Legal & General Group Plc and Legal & General Assurance Society Limited

  A.M. Best Affirms Ratings of Legal & General Group Plc and Legal & General
  Assurance Society Limited

Business Wire

LONDON -- May 24, 2013

A.M. Best Europe – Rating Services Limited has affirmed the issuer credit
rating (ICR) of “a” as well as the debt ratings for all debt issued or
guaranteed by the non-operating holding company, Legal & General Group Plc
(L&G) (United Kingdom). At the same time, A.M. Best has affirmed the financial
strength rating of A+ (Superior) and ICR of “aa-” of Legal & General Assurance
Society Limited (LGAS) (United Kingdom). The outlook for all ratings is
stable. (See below for a complete listing of the debt ratings.)

The ratings reflect L&G’s excellent risk-adjusted capitalisation and
well-established market position in its core markets. The ratings are further
supported by L&G’s improved earnings generated in 2012, despite the difficult
market conditions for life insurers in Europe.

L&G's risk-adjusted capitalisation is robust and remains supportive of its
ratings, underpinned by the very good quality of its fixed income portfolio,
an improving shareholders' equity base and a number of softer capital items,
for which A.M. Best gives credit (such as value of in-force business or
subordinated debt). The group’s International Financial Reporting Standard
capital grew by 8% to GBP 5.44 billion in 2012, driven by an increase in
retained earnings. L&G's profit before tax increased by 9% to GBP 1 billion,
driven by a growth in scale across all divisions. Though L&G is not immune to
financial market volatility, A.M. Best expects the group to hold up well to
the challenging market conditions and post good earnings in 2013.

L&G maintains an excellent business profile as one of the United Kingdom's
largest life insurance groups, with a widely diversified product range
including savings, protection and annuities, and a large asset management
business through Legal and General Investment Management (LGIM). LGIM remains
core to the L&G strategy, which includes growing the asset management business
as well as developing the group’s foreign business.

Positive rating movement is unlikely at this time.

Downward rating pressures could emerge from a worsening of the life market
conditions in the United Kingdom, L&G’s largest market. Rating pressure could
also emanate from a marked decline in its risk-adjusted capitalisation.

The following debt ratings have been affirmed:

Legal & General Finance Plc—

-- “a” on GBP 10 million 5.800% senior unsecured notes, due 2041

-- “a” on GBP 40 million 5.750% senior unsecured notes, due 2033

-- “a” on GBP 200 million 5.875% senior unsecured notes, due 2033

-- “a” on GBP 350 million 5.875% senior unsecured notes, due 2031

Legal & General Group Plc—

-- “a-” on GBP 400 million 5.875% undated subordinated notes

-- “a-” on EUR 600 million 4.000% subordinated notes, due 2025

-- “a-” on GBP 600 million 6.385% perpetual preferred securities

-- “a-” on GBP 300 million 10.000% subordinated notes, due 2041

The following indicative ratings have been affirmed for securities issued
under the GBP 2 billion medium term note programme:

Legal & General Finance Plc—

-- “a” on senior debt

Legal & General Group Plc—

-- “a-” on subordinated debt

The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at

In accordance with Regulation (EC) No. 1060/2009, the following is a link to
required disclosures: A.M. Best Europe - Rating Services Limited Supplementary

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best
Company. A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit

       Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.


A.M. Best
Charlotte Vigier, +(44) 20 7397 0270
Senior Financial Analyst
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
Anandi Nangy-Kotecha, +(44) 20 7397 0271
Assistant Director
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
Press spacebar to pause and continue. Press esc to stop.