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
www.ambest.com/ratings/methodology.

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

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
www.ambest.com.

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

Contact:

A.M. Best
Charlotte Vigier, +(44) 20 7397 0270
Senior Financial Analyst
charlotte.vigier@ambest.com
or
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Anandi Nangy-Kotecha, +(44) 20 7397 0271
Assistant Director
anandi.nangy-kotecha@ambest.com
or
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
 
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