Legal & General 2022 operating profit up stronger-than-expected 12%

FRANKFURT (Reuters) -Operating profit at British life insurer and asset manager Legal & General Group Plc rose a stronger-than-expected 12% in 2022, helped by its retail operations but dragged down by market moves at its asset management division, it said on Wednesday.

The company, one of Britain's largest insurers by assets and market capitalisation, said that it was on track to meet its medium-term goals.

"We are seeing some big positive macro and demographic trends which are reinforcing the growth of our business," Chief Executive Officer Nigel Wilson told Reuters, referring in part demand for its products as populations age.

Nevertheless, shares fell 2% in early trade in London.

Richard Hunter, head of markets at Interactive Investor, said there were "a couple of notes of caution to an otherwise healthy picture".

Operating profit of 2.523 billion pounds ($2.98 billion) in 2022 compared with 2.262 billion pounds a year earlier. Analysts had expected 2.451 billion pounds, according to a consensus forecast.

The global insurance industry in 2022 has faced challenges from expenses related to the war in Ukraine, soaring inflation, interest rate increases, and big claims from storms.

Operating profit at L&G's asset management division declined 19% after market moves from higher interest rates saw a decline in the value of assets under management.

Operating profit at the retail retirement and insurance business rose 33%, with its life insurance business in the United States returning to profit.

Analysts pointed to a positive impact in assumptions about life expectancy, which reduces L&G's obligations over time.

"People have been dying quicker than we expected," Wilson said. "Therefore, our assumption of how long people are living has changed."

RBC analysts, which rate L&G "outperform", called the results good overall. KBW, which rate it "market perform", said the results were "reassuring".

Wilson is retiring after more than a decade in the top job but will remain in the post until a successor takes the helm, the company said in January, in a process that could take a year.

($1 = 0.8460 pounds)

(Reporting by Tom Sims and SEditing by Paul Carrel)