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 firstname.lastname@example.org or Rachelle Morrow, +(1) 908 439 2200, ext. 5378 Senior Manager, Public Relations email@example.com or Anandi Nangy-Kotecha, +(44) 20 7397 0271 Assistant Director firstname.lastname@example.org or Jim Peavy, +(1) 908 439 2200, ext. 5644 Assistant Vice President, Public Relations email@example.com
A.M. Best Affirms Ratings of Legal & General Group Plc and Legal & General Assurance Society Limited
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