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1、Investing in a brighter futureLegal&General Group Plc|Annual report and accounts 20231_Cover_IFC_Highlights_At_a_glance_v101.indd 1Cardiff Central Square investmentThe Interchange:Wood Street HouseThe Interchange:CalonCentral QuayTransport infrastructureEmployment hub318Build to Rent(BTR)homes,the t

2、allest building in Cardiff120,000square feet office element715we are on track to deliver 715 BTR apartments at the former Brains Brewery site200mfinancing to support Wales&Borders franchise to improve services for train passengers while reducing carbon emissions through electrification1stBTR scheme

3、inthe city,forming part of our Central Square regeneration2,500+employees13,000jobs upon completion in the new developments:BBC Wales,HMRC,Cardiff University and law firmsNet zero designed to align with netzero carbon14 bay bus station and retail space transformationThe economic benefits that this l

4、arge-scale investment is bringing to Cardiff reflect our inclusive capitalism model,which sees us generate returns for shareholders whilst also making a difference to society.Front cover:Legal&General employees outside our new office,part of our significant investment in reshaping Cardiffs city cent

5、re.1_Cover_IFC_Highlights_At_a_glance_v101.indd 2Contents2 At a glance4 Chairs statement6 Chief Executive Officers Q&A8 Sir Nigel Wilson10 Our strategy12 Our business model14 Our stakeholders16 Place making18 Our climate actions20 Our people122 Group consolidated financial statements123 Independent

6、auditors report138 Primary statements and performance22 Chief Financial Officers Q&A24 Key performance indicators (KPIs)26 Tax review28 Business review40 A sustainable business51 Non-financial and sustainability information statement52 Managing risk55 Group Board viability statement56 Principal risk

7、s and uncertainties62 Letter from the Chair64 Board of directors66 Group Management Committee67 Governance report74 Employee engagement76 Section 172 statement and stakeholder engagement79 Data and Technology Committee report174 Balance sheet management232 Additional financial information256 Company

8、 financial statements263 Directors report and additional statutory and regulatory information 268 Shareholder information270 Alternative performance measures273 Glossary80 Nominations and Corporate Governance Committee report86 Audit Committee report92 Risk Committee report94 Directors report on rem

9、uneration(DRR)97 DRR quick read summary100 Summary of remuneration policy104 Annual report on remunerationAnnual report quick read A summary of the Annual report and accounts,highlighting strategy,performance and how the Group is structured,is available online: and nature impact management reportGov

10、ernanceFinancial statementsOther informationHow we bring our vision of inclusive capitalism to lifeHow we grow our business responsiblyOur financial statements for the year ended 31 December 2023Legal&General Group PlcAnnual report and accounts 20231Strategic reportGovernanceFinancial statementsOthe

11、r informationContentsAdjusted operating profit measures the pretax result excluding the impact of investment volatility,economic assumption changes caused by changes in market conditions or expectations and exceptional items.The measure enhances the understanding of the Groups operating performance

12、over time by separately identifying nonoperating items.Profit before tax comprises all items of income and expense recognised in profit or loss(excluding tax).Earnings per share(EPS)measures the profitability and strength of a company over time.It is determined as total shareholder profit after tax

13、divided by the number of shares outstanding.Store of future profit refers to the gross of tax combination of established contractual service margin(CSM)and risk adjustment(RA)(net of reinsurance)under IFRS 17.Performance measures and remunerationThe performance measures used for the purpose of deter

14、mining variable elements of directors remuneration are aligned to the Groups key performance indicators(KPIs).These are indicated with the icon:.For more details,refer to pages 100 to 103 of the summary of remuneration policy.Alternative performance measures(APMs)The Group uses certain APMs to help

15、explain its business performance,indicated with the icon:.Further information on APMs,including a reconciliation to the financial statements(where possible),can be found on page 270.Full definitions of the financial metrics above are included in the glossary on page 273.Solvency II operational surpl

16、us generation is the expected surplus generated from the assets and liabilities inforce at the start of the year.It is based on assumed real world returns and best estimate nonmarket assumptions,and includes the impact of management actions to the extent that,at the start of the year,these were reas

17、onably expected to be implemented over the year.Measures the greenhouse gases(GHG)associated with our direct operations.Scope 1 emissions are direct GHG emissions occurring from sources owned or controlled by the Company.Scope 2 emissions are indirect GHG emissions from consumption of purchased elec

18、tricity,heat or steam.This is made up of our ownership share of the emissions related to the assets we invest in within the Group proprietary asset portfolio.It includes bonds,equities,and investment property but excludes cash,derivatives,or any assets already covered in our operational footprint.It

19、 is measured per unit of investment.Solvency II capital coverage ratio,which shows own funds on a regulatory basis divided by the solvency capital requirement,is one of the indicators of the Groups balance sheet strength and aligns to managements approach of dynamically managing the Groups capital p

20、osition.1.Metrics have been rebaselined through a combination of methodology and data sourcing changes.Figures from the 2022 report,with an associated impact assessment,are provided in the 2023 Climate and nature report at: total scope 1 and scope 2(location)emissions have been subject to independen

21、t limited assurance by Deloitte.The basis of preparation(or reporting criteria)for our Group carbon footprint and Deloittes limited assurance report is available in our 2023 Climate and nature report at a glanceFinancial measuresProfit before tax m 195m(2022:939m)Adjusted operating profit m1,667m(20

22、22:1,663m)Store of future profit bn14.7bn(2022:13.5bn)Earnings per share p7.35p(2022:12.84p)Solvency II operational surplus generation m1,821m(2022:1,805m)Solvency II capital coverage ratio224%(2022:236%)Non-financial measuresInvestment portfolio economic GHG emission intensity56 tCO2e/m(2022:62 tCO

23、2e/m)1Operational footprint(scope 1 and 2(location)27,722 tCO2e2(2022:30,062 tCO2e)With the introduction of IFRS 17 on 1 January 2023,some of our previously reported financial measures are no longer relevant and others have been restated on the new basis.Accordingly,we have presented the current yea

24、r and restated prior year values only.Legal&General Group PlcAnnual report and accounts 20232Strategic reportChicagoStamfordFrederickBermudaTokyoHong KongSingaporeDublinStockholmAmsterdamLondonHoveBracknellCardiffBarnsleyEdinburghFrankfurtMilanSolihullOur businessesWe benefit from scale in each of o

25、ur businesses.Our businesses work together to deliver on our purpose and to drive synergies across the Group.We are expanding our international reach.See more about our business model on page 12Our officesInstitutional retirement (LGRI)Capital investment (LGC)Investment management(LGIM)Retail13.7bnn

26、ew business premiums4,500homes delivered1.2tnassets under managementc.14 millionpeoples needs metWe take on pension liabilities from corporate schemes in both the UK and the US.This pensions derisking gives companies greater certainty over their liabilities while providing guaranteed payments to ind

27、ividuals withintheir schemes.Our investments across specialist commercial real estate,clean energy,housing andalternative finance generate attractive shareholder returns and create alternative assets which benefit society.Our Build to Sell business,CALA,has grown to become the 10th largest housebuil

28、der in the UK by revenue.We are one of the worlds leading asset managers,with internal andexternal clients.We are the market leader in UK defined contribution schemes.We are also a leader in responsible investment,and continue to innovate and be recognised for our strength in this growing area of th

29、e market.We help millions of people in the UK and the US create brighter financial futures.We support their savings,protection,mortgage and retirement needs through our retailand workplace businesses.We are a market leader in UK Retail protection and retirement income.Our workplace savings business

30、administers the largest and fastestgrowing commercial UK MasterTrust.Our US protection business continues to grow due to our ongoing investment in technology and digital transformation.See page 29See page 32See page 35See page 37Legal&General Group PlcAnnual report and accounts 20233Strategic report

31、GovernanceFinancial statementsOther informationAt a glanceAnnual General Meeting 2024The Annual General Meeting(AGM)will be held on Thursday 23 May 2024 at the British Medical Association,BMA House,Tavistock Square,Bloomsbury,London WC1H 9JZ,with additional facilities for shareholders to join and vo

32、te electronically.Dividend policyThe Groups dividend policy states that we are a long-term business and set our dividend annually,according to agreed principles.The Boards intention for the future is to maintain its progressive dividend policy,reflecting the Groups expected medium-term underlying bu

33、siness growth,including measurement of capital generation and adjusted operating profit.20192020202120222023Full year dividend p19.3720.3418.4517.5717.57Final dividend to be paid on 6 June 2024 14.63p(2022:13.93p)ChairsstatementMomentum through change.A growing force for good.”Legal&General Group Pl

34、cAnnual report and accounts 20234Strategic reportTransitionIntroduction2023 marked the beginning of a transition for Legal&General,with the Companys announcement in January that our Chief Executive Officer(CEO),Sir Nigel Wilson,would stand down by the end of the year,and the appointment of Antnio Si

35、mes,with effect from 1 January 2024,as his successor.It is pleasing in that context to be publishing an Annual report that demonstrates continued good progress across the full breadth of our organisation.This is a testament both to Nigels personal impact,and the strength of the business he has helpe

36、d to build over the course of a decade.As we look back on the year,I want to reiterate my gratitude,alongside the Boards,to Nigel for his relentless commitment to Legal&General,and for his leadership and contribution since he took up his post over a decade ago.Under his stewardship,Legal&General del

37、ivered outstanding shareholder returns,while putting purpose and societal impact at the heart of our choices,through our championship of inclusive capitalism.Following a rigorous global selection process,Antnio Simes formally assumed the role of CEO on 1 January 2024.Antnio brings a formidable leade

38、rship track record at the most senior level in financial services,working across complex global organisations.His energy,ambition,and clarity of strategic thinking stood out during the selection process,as did his strong belief in the positive role that business should play in society which,of cours

39、e,he shares with Legal&General.Change beyond our businessBusinesses are now becoming accustomed to a new inflation and interest rate environment,with the global economic outlook remaining uncertain.Geopolitical tensions have also accelerated with the impacts of the war in Ukraine,conflict in the Mid

40、dle East and the prospect of several important elections in the coming year.These conditions create complex challenges for investors to navigate,as well as rises in cost of living for many households.Our customers rely on Legal&General to continue to pay their pensions,protect their income and manag

41、e their assets.I am proud of the role we play,always keeping sight of our purpose,making a real and positive difference to peoples lives.2023 was also a time of wider transition in our industry,particularly in our regulatory environment,with the introduction of IFRS 17 and the Consumer Duty.IFRS 17

42、changes the way insurance firms account for insurance contracts,and the Consumer Duty sets out new rules for delivering good outcomes for all customers.Both of these initiatives are important context for Legal&Generals business,and I am pleased to report that our teams have done a terrific job to pr

43、epare for their introduction.Thanks are due to all colleagues involved.Positive momentumIn 2023,we delivered a resilient set of results,with an adjusted operating profit of 1.7 billion and a 9%growth in our store of future profit to 14.7 billion.Profit for the year of 443 million and EPS of 7.35 pen

44、ce reflected mark-to-market movements and certain one-off accounting impacts.We have a strong balance sheet,with a Solvency II coverage ratio of 224%,and capital generation in the year of 1.8 billion.These have supported a final dividend of 14.63 pence,consistent with our stated ambition to grow the

45、 dividend at 5%per year to 2024.Our performance highlights the benefits of our synergistic business model.This year,we have seen more long-standing LGIM clients transition to our pension risk transfer(PRT)business,where we continue to take advantage of our powerful asset origination and management c

46、apabilities to match these liabilities with low capital strain.The Group continues to build out its international franchises.We have made good progress in the US over the last decade and LGIM continues to expand in Europe and Asia,with 40%of assets under management(AUM)now outside of the UK.We remai

47、n on track to achieve our five-year ambitions,and ready to set new,stretching goals for the next phase of our journey.A growing force for good Acting in both an economically and socially useful way is core to the way we do business.We have identified strategic growth areas and in doing so have gener

48、ated consistent,sustainable,and socially beneficial returns.We are committed to supporting individuals in planning their financial futures,and are proud to help regenerate towns and cities,provide housing and deliver on our climate commitments.We are delighted to now be settled into our new office i

49、n Cardiff,which brings these elements together to create a workplace with sustainability and wellbeing at its heart.This is the culmination of years of strategic investment and development around Cardiff Central Square Legal&General has invested more than 1 billion in the city in recent years and un

50、derlines the broad and positive value our approach can generate for our shareholders,customers and our people.We continue to take action on climate change,regarding this as both a responsibility and a fundamental element of our business strategy.Our 2023 Climate and nature report highlights our prog

51、ress against the targets we set out in our Climate transition plan,released in April 2023,and our commitments for the coming years.Our material climate disclosures are disclosed on pages 45 to 48 of this report.Looking aheadWith a first-class executive team,a strong and resilient business model and

52、platform for growth,the opportunities for impact are plentiful.In our first months working together,following a smooth and well-managed leadership transition,Antnios dynamism and ambition have been evident.I am confident we can look forward to going from strength to strength under his leadership.In

53、closing,I should like to extend my thanks and appreciation to leaders and teams across Legal&General for their enthusiasm and delivery throughout the year,and to our shareholders for their continued support.I look forward to working alongside you,and on your behalf,in the year ahead.Sir John Kingman

54、ChairLegal&General Group PlcAnnual report and accounts 20235Strategic reportGovernanceFinancial statementsOther informationChairs statementChief Executive Officers Q&AWelcoming Antnio SimesLegal&General is a business with strong foundations,and excellent potential.”What attracted you to Legal&Genera

55、l?Three things stood out to me:our sense of purpose and commitment to playing a positive role in society,the quality and performance of our businesses,and the talent and commitment of our people.Few businesses have such a long-standing heritage this year is our 188th birthday.We have seen through mu

56、ltiple economic cycles and societal changes,and evolved to stay relevant.We have proven that we can adapt and thrive in changing circumstances,and support our customers and partners throughout.Today we are a very significant business a global leader in pension risk transfer,supporting the needs of c

57、.14 million people through our Retail division,managing 1.2 trillion of client assets,and investing alongside them to originate new,socially valuable assets generating returns that help to fulfil long-term pension liabilities.With this unique synergistic approach,and our track record of consistent p

58、erformance and delivery for our shareholders,clients and customers,we are well placed to continue to seize the many growth opportunities in our markets.Legal&General Group PlcAnnual report and accounts 20236Strategic reportAmbitioncustomer,institutional client,co-investor or partner.Understanding wh

59、ere our clients are coming from and being able to walk in their shoes is really important that focus keeps us compassionate and relevant,and helps us to spot new opportunities to add value.Ill be encouraging all our teams to dedicate time to building that connection.Having lived and worked around th

60、e world,I bring a truly international mindset.I understand what it takes to succeed and scale in different markets,particularly the importance of understanding local culture and knowledge.I am also focused on how we take learning from different contexts to improve and innovate elsewhere.Finally,with

61、 nearly 30 years of experience in financial services,I have a strong appreciation of the complexity of our stakeholder environment,and how it shapes our opportunities and success.Im committed to ensuring Legal&General continues to be an insightful,thoughtful voice in our industry.What are your early

62、 observations on the business?My early observations are very positive.The strengths I saw looking from the outside are authentic.We are purposeful and commercial;the business is full of talented and expert people.Our track record of delivery against the targets we set in 2020 shows the power and res

63、ilience of our business model.Alongside this,I am focused on our future growth opportunities.The world is hungry for capital and expertise to support new industries and the transition to net zero;institutions want help to navigate a changing economic backdrop;and individuals increasingly need suppor

64、t to prepare for the future financially.With our strengths in asset management and origination,and a respected,trusted brand,we are well placed to help and to benefit.To be successful,we need to communicate our vision clearly and crisply.My focus over the coming months is to define a strategy that s

65、hows why and how Legal&General will be as relevant in the next 188 years as it has been to date.How important are culture and purpose to you as a business leader?Legal&General is a great example of the importance of purpose and culture in action.Inclusive capitalism has been a powerful galvanising f

66、orce inside the business and beyond it,and delivered consistent returns for our shareholders.It is motivating to hear how people love being part of Legal&General because we have a clear role to play in society,and to see this reflected in the choices we have made as a business.Businesses have a resp

67、onsibility to help solve problems.All our business divisions are shaping how society and individuals prepare for the future.Our decisions can help make that future as positive a place as possible for the next generation.When can we expect to hear more on your plans for the business?I have thoroughly

68、 enjoyed my first few months at Legal&General.My conversations with our stakeholders,including our shareholders,continue to help me and my team to develop our plans.I look forward to meeting more of our shareholders at the Annual General Meeting in May and providing an update on strategy at our Capi

69、tal Markets Event in June.Antnio SimesChief Executive OfficerCentral to this success are our people.Legal&General has a reputation for the dedication and expertise of its employees.I was drawn to the Company as a place with a rich culture,in which excellent people thrive.Im pleased to say these impr

70、essions have only been reaffirmed now I have joined.In short,Legal&General is a business with strong foundations,and excellent potential.I am looking forward to helping define and lead our next phase.What should shareholders expect from you as a leader of Legal&General?A fresh perspective.I bring ex

71、periences from outside the business,which means I ask different questions and look at issues in new ways.I am encouraging us to think broadly about our markets and how we work.My first priority as CEO has been to listen.By taking the time to hear from my colleagues,our customers,clients,shareholders

72、 and partners,I am learning what Legal&General means to them,getting their perspectives on what matters most,and where they see our future potential.Looking ahead,I hope to combine strategic vision and focus with consistent delivery.I am working with my team to articulate our long-term growth strate

73、gy,considering how each of our divisions needs to focus and evolve to address our biggest opportunities.I look forward to presenting this later in the year,and working with our people and partners to execute our plans.How will the experiences you bring from other organisations shape your approach?Iv

74、e learned that putting customers at the top of our priority list is how we succeed in the long run.Every decision we take should be with our customer in mind,whether thats a retail Legal&General Group PlcAnnual report and accounts 20237Strategic reportGovernanceFinancial statementsOther informationC

75、hief Executive Officers Q&ASir Nigel Wilsoncompanies,and in the UK ushered in a period of quantitative easing combined with public sector austerity.This sustained for nearly a decade,until the punctuation of the Covid-19 pandemic,and then the war in Europe,spurred rising inflation,interest rates and

76、 living costs.Politics has become more turbulent,in business Big Tech has been dominant,and globally we have recognised the need to transition to a lower carbon way of life,and the extent of change and innovation required to deliver that shift.Developed countries are grappling with the consequences

77、of a rapidly ageing population,and looking to square the opportunities presented by advances such as AI with the potential for equally transformative impacts on the labour market.Our approachLegal&General has had to be alert and adaptable in the context of these changing circumstances.I took over a

78、business which had lost c.70%of its annuity business in the face of pension freedom reforms and disposed of around 20 Legal&General businesses to allow us to modernise,diversify and grow.In my early years as CEO,our annual reporting was led with the tagline stepping up.This captured my belief,shared

79、 with my colleagues,that we could both positively advance and benefit from the changes around us.I am proud that the business we built together has shown itself to be not just resilient,but able to evolve and thrive.The long viewWhen we began our usual planning for our Annual report and accounts in

80、autumn 2023,the team shared with me a selection of those we had produced over the course of my tenure at Legal&General.It was striking how much had changed.Legal&General was a part of my life for 14 years,a third of my career.During that time,we saw transformation on a global,national and business l

81、evel,of a scale that none of us could have predicted.I joined the Group as Chief Financial Officer,during the Global Financial Crisis.The ripple effects of which led to reflection on the role and responsibilities of financial services With thanksLeading Legal&General has been the most enjoyable and

82、rewarding job of my career.”With additional thanks to:Ali Toutounchi,Sarah Aitken,Bill Hughes,Drew Love,Mark Holweger,Amy Ellison,Kevin Whitaker,Symon Drake Brockman,Jeff Davies,Tim Stedman,Mark Gregory,Geoffrey Timms,John Godfrey,Chris Knight,Stephen Licence and Emma Hardaker-Jones.Legal&General Gr

83、oup PlcAnnual report and accounts 20238Strategic reportA large part of our success has been driven by our people,who have seen the opportunity that sits on the other side of challenge,and have encouraged and supported others to do the same.Over the past 14 years,the make up of Legal&General has chan

84、ged.We have taken informed and rewarded risks;selling,combining and creating businesses to build the organisation we have today.This enabled us to build a global PRT business,delivered under the stewardship of five talented CEOs:Simon Gadd,John Pollock,Kerrigan Procter,Laura Mason and Andrew Kail,wh

85、ilst building the UKs first 1 trillion asset manager under Mark Zinkula and Michelle Scrimgeour.Alongside these milestones,through the creation of Legal&General Capital(LGC),we have taken a significant share of the UK housebuilding market,enabled impactful regional regeneration projects,supported gr

86、owing industries and invested in c.700 start-ups under Kerrigan Procter and Laura Masons leadership.Our investment in Pemberton,for example,has seen it grow from a small business,when we invested in 2014,to a major mid-market lending platform,which has raised over 19 billion from 227 investors globa

87、lly across seven strategies.Meanwhile,we have internationalised our operations,opening offices in Bermuda,Singapore,China,Hong Kong,Japan,Germany,Italy and Switzerland.Our constant has been the way we have chosen to do business,as an organisation with purpose at its core.Inclusive capitalism led us

88、to look for opportunities to invest profitably in productive assets that address structural societal needs,with the benefits being felt by the members of the pension funds and investments we manage,communities and businesses on the ground,and our shareholders.Our reputation for combining values with

89、 expertise has enabled us to work with some of the most respected universities in the world,the most exciting new businesses,and the most innovative investors across the private and public sectors.Continued progress2023 demonstrated the ongoing power of this approach as we remained on track for the

90、stretching targets we set ourselves back in 2020.In a challenging economic backdrop,this is testament to our resilience,competitiveness and the power of our synergistic business model.We recorded our largest ever PRT volumes in both the UK and the US,including the largest ever single transaction by

91、premium in the market with our buyout of the Boots Pension Scheme.In 2023,99%of our PRT volumes arose from the conversion of long-standing asset management clients.In a challenging interest rate environment,LGIM continued to expand its client offering and despite significant inflationary impacts,we

92、have taken action to keep absolute costs flat.Our asset origination business,LGC,showed continued momentum against its five-year targets including significant crowding in third-party capital.In October,we announced that Greater Manchester Pension Fund,the UKs largest local authority pension fund,wou

93、ld invest in our joint venture,Bruntwood SciTech,which is leading the way in providing workspace for innovative UK businesses.We also began construction on our first US investment with our joint venture partner,Ancora,a state health laboratory in Rhode Island.In our Retail businesses,our annuities a

94、rm delivered its strongest ever results with a record-breaking 1.43 billion in sales under Bernie Hickmans leadership.This reflected our persistence in building our offering throughout a time of lower interest rates.Our workplace pensions business,an increasingly critical part of the long-term savin

95、gs market,also continues to strengthen.In the US,protection sales hit a record high of$175 million annualised premium equivalent(APE).Finally,we have seen real successes,working with government,to bring forward policy change to set us up for future growth.In December 2023,we saw the passage of the f

96、irst phase of Solvency UK reforms into law.This is the first step in delivering a regime that will uphold policyholder security whilst enabling greater investment in productive assets.Moving forwardIn closing,I want to thank our shareholders for their support over the last decade and a half.Leading

97、Legal&General has been the most enjoyable and rewarding job of my career.I am confident that the business will continue to develop and prosper with Antnio at the helm,with 11,500 talented and committed colleagues working alongside him to deliver terrific outcomes for all our stakeholders.All the bes

98、t,Sir Nigel Wilson20092012Timeline of achievements2013Joined Legal&General Group as Chief Financial OfficerAppointed Chief Executive OfficerInvested 250m into 4,000 social homes with Places for People,generating long-term income for Legal&General pension saversInvested in CALA,now the 10th largest U

99、K housebuilder by revenueInvested in the Pemberton platform and raised over 19bn from 227 investors globally across seven strategies since Legal&General first investedCommitted to Cardiff urban regeneration scheme,having since invested over 1bn in the cityCreated a long-term partnership with Newcast

100、le City Council and Newcastle University to deliver Helix,with 700 residential homes,office and research space and a flagship hotelAwarded Britains Most AdmiredLeaderEstablished major partnership with Bruntwood SciTech to deliver science and technology real estatePassed 1tn AUMCreation of a 4bn part

101、nership with The University of Oxford to develop homes for university staff and students,together with science andinnovation districtsPartnered with Sky to develop Sky Elstree,the largest independent film studio in EuropeCombined life insurance,annuities,and workplace businesses to create Legal&Gene

102、ral RetailKnighted for Contribution to Finance and Regional DevelopmentWon Britains Most Admired CompanyEstablished 4bn partnership with West Midlands Combined AuthorityAnnounced UKs single largest PRT buy-in,4.8bn with Boots,and strongest ever year for annuity sales201420162017201820192020202120222

103、023Legal&General Group PlcAnnual report and accounts 20239Strategic reportGovernanceFinancial statementsOther informationSir Nigel Wilson Short-term influencesClimate change2023 has been the hottest year on record.We continued to see more extreme weather events,including several episodes of flooding

104、 throughout the UK and unprecedented wildfires in Europe,the US and Canada.These events demonstrate the rapid and significant impacts of climate volatility and ecosystem health deterioration.Despite this,2023 also saw the rapid increase in deployment of solar and wind energy.We are making positive p

105、rogress against our Climate transition plan,and continue to enhance our risk management framework to ensure our business remains resilient against various climate outcomes.Geopolitical landscapeOngoing conflicts in Ukraine and the Middle East,along with broader geopolitical tensions,could significan

106、tly disrupt global economic activity.We are carefully monitoring these impacts to ensure we remain financially and operationally resilient to adverse events.Economic outlookThe global economic outlook remains challenging.While the market continues to predict falls in interest rates over 2024 support

107、ed by an easing of inflationary pressures,other factors may slow this improvement.This may impact consumer sentiment,however we believe that our products and services are relevant across a range of economic scenarios helping our customers to achieve financial security.Our strategyOur strategy is dri

108、ven by six growth drivers that affect everyone.In responding to these long-term drivers,our strategic priorities aim to deliver sustainable profits as well as positive social and environmental outcomes.Our business model is aligned with our strategy,ensuring we derive maximum benefit for our stakeho

109、lders.Environmental,social and governance issues are central to inclusive capitalism and are inherent to all six growth drivers.Ageing demographicsAs populations live longer,their pensions need to last longer too.Companies increasingly need to find solutions to their ongoing pension commitments.At t

110、he same time,individuals need to ensure that their retirement funds and other assets can finance longer retirements.Market opportunityWe participate in the global PRT market,focusing on corporate defined benefit(DB)pension plans in the UK,the US,Canada,and the Netherlands,which together have more th

111、an 6 trillion of pension liabilities.Strategic priorityWe aim to be global leaders in pensions de-risking and retirement income solutions.During 2023,we wrote a total of 15.2 billion of bulk and individual annuity business globally,up 44%on the previous year.This included our largest ever single PRT

112、 transactions in both the UK and the US markets at 4.8 billion and$0.8 billion respectively,whilst individual annuities increased by 50%over 2022.We also announced plans to enter into a long-term strategic relationship with Dutch insurer Lifetri,putting us in a strong position to capitalise on expec

113、ted growth in the Dutch PRT market.1Globalisation of asset marketsAsset markets are increasingly globalised and growing.North America,Asia Pacific andEurope are all attractive markets which continue to expand.We look for selective opportunities to build and expand our successful UK business model ab

114、road into markets where we believe we can thrive.Market opportunityAs global assets under management are projected to increase from more than$115 trillion in 2022 to$147 trillion by 2027,we will continue to innovate in the US retirement income market,expand into European wholesale asset management a

115、nd increase our presence in Asia Pacific.Strategic priorityWe aim to build a truly global asset management business,entering new markets and expanding our existing operations.We continue to expand our global footprint with international AUM growing by 81%since 2018 and now representing 40%of our tot

116、al AUM.New offices opened in Singapore and Switzerland to support our growth ambition in Asia and Europe.2Legal&General Group PlcAnnual report and accounts 202310Strategic reportAddressing climate changeTo minimise the most damaging consequences of climate change,governments around the world agree t

117、hat we must limit global warming to 1.5C.This requires a transition to a low-carbon economy while halting nature and biodiversity loss.Market opportunityAs global finance supports the changes our planet needs to address climate change and prevent nature and biodiversity loss,this creates a significa

118、nt shift in investment allocation and the emergence of new industries in climate solutions.Despite the short-term uncertainty,world leaders at COP 28 reaffirmed their commitment to rapidly expanding investment in renewable energy supply and recognised the need for nature-based solutions.Strategic pr

119、iorityWe are able to support the fight against climate change and nature loss through the positioning of our investments,our influence as one of the worlds largest asset managers and through the management of our own operational footprint.In 2023,we issued our first Climate transition plan and are n

120、ow focused on delivering against it.6Technological innovationConsumers,clients and businesses look to digital platforms to help organise their finances and working lives.Technological solutions can increase security and improve the ways we work and access information.Market opportunityThe market for

121、 new individual term life business in the US is expected to increase to$3.2 billion over the next three to five years.We anticipate continued premium growth across our UK and US protection businesses as technological innovation makes our products more accessible to customers and digital transformati

122、on creates competitive advantage in the US marketplace,while enabling further product and pricing enhancements.Strategic priorityWe will be enhancing our digital capabilities in the UK insurance and grow in the US by expanding into adjacent markets.The US protection grew APE from$129 million to$175

123、million(a 36%increase)in 2023 creating market differentiation through our US digital platform,as well as digital distribution expansion.5Welfare reformsThere is a continued need to protect people from financial uncertainty,which includes helping people take personal responsibility for retirement sav

124、ings,and safeguarding their financial wellbeing and resilience.Market opportunityFiscal pressures,inflation and an ageing population are placing the state pension and social security system under strain.This in turn increases the need for individuals to build and maintain their financial wellbeing.W

125、orkplace defined contribution(DC)assets are expected to grow to 1.3 trillion by 2032,with a growing need for pension decumulation solutions.Strategic priorityWe continue to deliver value for money for our Workplace DC members,providing a low-cost pension product to save for their retirement.Our Reti

126、rement Planner tool helps customers understand their retirement goals and the launch of our podcast,A Little Bit Richer,has improved financial understanding and awareness amongst a younger audience.We also offer a range of wider benefits to help customers manage their physical and mental health and

127、wellbeing.4Investing in the real economyThroughout the UK and beyond,there has been a long-term trend of under-investment in major towns and cities,and we continue to experience a serious housing shortage,while small and medium enterprises can also struggle to achieve scale without access to long-te

128、rm capital.Market opportunityThe UKs levelling up programme seeks to leverage private sector institutional capital to support urban regeneration and drive economic growth.Regulatory reform is enabling better deployment of pension funds to growth opportunities such as building more homes,creating sci

129、ence parks,and investing in start-up companies.Strategic priorityBy investing capital over the long term,we aim to become leaders in direct investments,whilst investing our assets in an economically,environmentally and socially useful way.In 2023,we invested over 1.0 billion in housing and over 8.5

130、billion in social infrastructure.We believe investing to address long term,enduring societal needs will enable strong shareholder returns,as well as improve the lives of our customers.3Legal&General Group PlcAnnual report and accounts 2023Our strategy11Strategic reportGovernanceFinancial statementsO

131、ther informationWe aim to be leaders in retirement and protection solutions,investment management and capital investment.By taking a long-term approach to inclusive capitalism,our businesses work together to make a difference.What we do Our business modelProvides capitalDevelops assets that support

132、our pension liabilitiesGenerates income and AUMProvides asset management servicesWorkplace client relationshipsAsset management servicesProvides asset management services and co-investsBuilds alternative assets,including cleanenergy assetsCapital investmentWe use some of our customers pension assets

133、,as well as the Groups shareholder capital,to makelong-term investments in assets such as clean energy,housing and alternative finance.Investment managementWe are one of the worlds largest asset managers and a major global investor.Lifetime mortgage originationProtection capital benefitsInstitutiona

134、l retirementWe provide institutional PRT solutions,guaranteeing the retirement income for corporate pension scheme members.Annuity asset portfolio managementRetailWe are a leading provider ofUKretail retirement and protection solutions and US brokerage term life insurance.Contributes DC and annuity

135、AUMLegal&General Group PlcAnnual report and accounts 202312Strategic reportThe Whitehall Riverside scheme contributes to LGRIs total direct investment into BTR,which stood at in excess of 1 billion at the end of 2023.Following the acquisition of our earlier BTR sites:Mustard Wharf in 2017 and Tower

136、Works in 2021,Whitehall Riverside is in addition to almost 500 apartments already delivered by Legal&General in Leeds,making us the citys largest investor and owner of BTR.The Whitehall Riverside development consists of the delivery of 500 new homes and has been carefully considered to ensure that r

137、esidents benefit from the diverse and growing employment opportunities,as well as its cultural destinations,local amenities,and strong transport links including Leeds Central station,which is within a five-minute walk.This investment aligns with our commitment to establish positive environmental and

138、 socio-economic impact,addressing sustainability issues and innovating for biodiversity by including a riverside green and new trees in the wider public realm,as well as an ambition to drive down operational carbon emissions.With funding provided by LGRI,and utilising LGIMs expertise as an asset man

139、ager,this demonstrates how our businesses work together to make a difference.The power of responsibly investing our pension savings in urban regeneration,thereby transforming and reshaping cities,creates productive assets for future generations.This is inclusive capitalism in action.Funded by Legal&

140、General,and developed in partnership with Glenbrook,the Whitehall Riverside residential complex is Leeds city centres largest BTR funding in 2023.Our synergies in action:Our biggest investment in Leeds to date140mresidential development2026expected completion date500new homes committedBoth instituti

141、onal retirement and investment management businesses are being actioned within this investment.Legal&General Group PlcAnnual report and accounts 202313Our business model13Strategic reportGovernanceFinancial statementsOther informationShareholdersOur shareholders are institutional and individual inve

142、stors.We provide them with honest and transparent information on our strategy,outlook and business performance and we generate value through share price appreciation and a progressive dividend.1 2 3 4 5 6We invest shareholder capital(targeting returns)and retirement capital(for long-term income stre

143、ams to pay retirement benefits)into environmentally friendly and socially useful investments,including alternative assets such as urban regeneration,clean energy and affordable housing.In 2023,we achieved record new business volumes in our institutional and retail annuities businesses,as well as US

144、protection.Our store of future profit,comprising CSM and RA,grew 9%while adjusted operating profit remained flat demonstrating resilience in the volatile market environment.EmployeesOur employees are based in the UK,the US and other countries and jurisdictions in Europe and Asia.Were working to buil

145、d a more diverse workforce and inclusive workplace,where care is taken to protect individuals wellbeing and resilience.3 5 6We supplemented the data gathered through our Voice surveys with targeted employee research using Natter a tool for collaboration and discussion provided by an investee of our

146、capital business to improve our understanding of employees views of our culture.In the UK,we continue to enjoy a productive partnership with Unite,the union which represents employees individually and for collective bargaining,and with our in-house Management Consultative Forum.Our Cardiff-based emp

147、loyees moved into our newly constructed office in the centre of the city,the latest phase in our investment in the Welsh capital.CustomersOur customers include those saving for retirement,recipients of retirement income,insurance policyholders,mortgage holders,residents of our housing and retirement

148、 villages,and investors.Listening to our customers helps us to better understand their needs,and provide suitable,reliable products and services.1 4 5 6Our segmentation model helps us personalise customer service at key financial moments.Weve improved digital journeys like pension transfer and conso

149、lidation.Our Consumer Duty driven research shaped how we identified vulnerabilities,developed new products and services,and supported customers.One million people saw our TikTok videos in the first three months of 2023.Our new over 50s lifetime mortgage reimagined retirement lending and our Focus Fo

150、rtnight webinars broadened intermediaries knowledge.Our protection retention project helped people stay covered despite the cost of living crisis,and Group protections wellbeing guide helped employees and employers respond to it.Growth drivers1 Ageing demographics2 Globalisation of asset markets3 In

151、vesting in the real economy4 Welfare reforms5 Technological innovation6 Addressing climate changeOur stakeholders In shaping our strategy,we consider the impact on our stakeholder groups.Below,we provide just a few examples of how stakeholder engagement influences our business and the associated gro

152、wth drivers.The impact of our business is wide reaching and affects different stakeholder groups.We place great importance on considering the needs of all our stakeholders in our decision making,and actively encourage their participation.How we engage with our stakeholdersOur stakeholdersLegal&Gener

153、al Group PlcAnnual report and accounts 202314Strategic reportRegulatorsThe Group is subject to financial services regulations and approvals in all the markets in which we operate.We maintain a constructive and open relationship with our regulators and have a programme of regular meetings between the

154、 Groups executive and non-executive directors and our UK regulators.1 2 3 4 5 6We hold regular discussions with our key regulators on aspects relevant to the evolving regulatory agenda to ensure our strategic focus meets the needs of all stakeholders.We actively engage with regulatory consultations

155、and calls for evidence across key areas of regulatory policy and reform.In 2023,this included engagement on Solvency UK,the Corporate Governance Code,the Sustainability Disclosure Requirements and Diversity and Inclusion.We liaise with our supervisors to ensure timely notification of changes to the

156、Groups regulated population and accuracy of the Financial Services Register.SuppliersWe work with a broad range of suppliers,from services and material providers to IT and software suppliers.We strive to work with like-minded businesses who comply with our Code of Conduct and business principles.Thi

157、s includes operating ethically,taking environmental responsibility and treating workers with respect and dignity.5 6We work with suppliers to deliver value for money for the organisation,to bring innovation through best practice and to support continued growth for Legal&General.We aim to build diver

158、sity and inclusion into our supply chain to create an equal and fair marketplace,where opportunities are open to all.We are committed to protecting the environment and this year have set a target to encourage our suppliers to transition to net zero by ensuring that 80%,by spend,of our suppliers will

159、 set a science-based1 carbon reduction target by the end of 2026.CommunitiesOur purpose is to improve the lives of our customers,build a better society for the long term,and create value for our shareholders.This inspires us to use our assets in an economically and socially useful way,and to engage

160、with civil society,encouraging our people to get involved in community causes.1 3 4 6Following the 2022 launch of our place-based social impact toolkit,2023 saw us put the methodology into action.The toolkit helps us identify local needs and priorities by working with communities,and to make positiv

161、e economic,environmental and social impacts through our real estate investments.We expanded our partnership with the charity RedSTART to deliver age-appropriate financial education to primary school children,helping expand the programme into South Wales and the Brighton and Hove area.We matched over

162、 452,000 in employee charitable fundraising and volunteering.In total,we donated 3.4 million to civil society sector organisations,including 200,000 through our annual Summer Challenge.Our contribution to the United Nations Sustainable Development Goals The United Nations Sustainable Development Goa

163、ls(SDGs)are focused on tackling the pressing social,economic and environmental issues that could threaten the livelihoods and wellbeing of people worldwide.Contributing to the SDGs is integral to inclusive capitalism.It is important that our business priorities and strategy align with the goals and

164、that we can demonstrate how the outcomes we are delivering contribute to specific SDGs.As our business grows and evolves,our approach to the SDGs will progress too.The following SDGs contribute to many of our key stakeholder engagements as they are most heavily aligned to our growth drivers:3.Good h

165、ealth and wellbeing8.Decent work and economic growth 4.Quality education 9.Industry,innovation and infrastructure 5.Gender equality 11.Sustainable cities and communities 7.Affordable and clean energy 13.Climate action 1.We define a target as science based if it is approved by the Science Based Targe

166、ts initiative(SBTi)or is aligned to its criteria i.e.is a mid-term reduction target with enough ambition to align with the global net zero trajectory.Legal&General Group PlcAnnual report and accounts 2023Our stakeholders15Strategic reportGovernanceFinancial statementsOther informationPlace makingWe

167、are aiming to reverse the trend of chronic under investment,reduce economic inequalities and create better communities in which to live and work.Creating better placesLegal&General Group PlcAnnual report and accounts 20231616Weve thought hard about how we can catalyse and form local partnerships to

168、create real positive change,including how we communicate and measure social impact.”Shuen ChanHead of Responsible Investment&Sustainability at LGIM Real AssetsAncora L&Gwas formed in 2022,as a joint venture between the US-based science and technology real estate developer Ancora and Legal&General Ca

169、pital(LGC).It was created as a real estate platform dedicated to driving science and technology growth across the US.The partnership will develop a 210,000 sq.ft.building designed to provide essential space for public health services in Rhode Island,advancing the states critical public health and sa

170、fety goals.It will also provide laboratories for development and application of cutting-edge new science,which is anticipated to make a difference to future public health and quality of life.In March 2023,we purchased a site(Science at Square 10)near the Yale University campus,to further our city-ap

171、proved plan to build anew 11-storey lab and officebuilding.It will house university research,forward-looking companies,and innovative entrepreneurs in one vibrant hub of growth and discovery.Poole Ancora L&G We reinvigorated Kingland high street in Poole with an innovative scheme to help Dorset-base

172、d start-ups and independent businesses during the pandemic.This has generated 3 million in direct turnover for operators since opening in 2021,led to 2.2 million in additional sales for operators at LGIM Real Assets neighbouring shopping centre in the first year of opening,created new jobs and incre

173、ased footfall by 16%ahead of its pre-pandemic trend.We also developed a partnership of local stakeholders representing the needs of the community,such as charities tackling issues including homelessness,the NHS,and the local university.Our partnership with the NHS,who took 20,000 sq.ft.within the ce

174、ntre to create an outpatient assessment clinic,treated over 15,000 patients in its first 15 months of opening.Science at Square 10 to complete in 2026.Legal&General Group PlcAnnual report and accounts 202317Strategic reportGovernanceFinancial statementsOther informationPlace making17Strategic report

175、GovernanceFinancial statementsOther informationOur climate actionsThe need to tackle climate change and nature loss is becoming increasingly urgent.It is one of our strategic growth drivers and we aim to deliver via our three-pillar strategy:Invest,Influence and Operate.As purpose-driven,impact-led

176、investors,we are pleased to provide funding to our partners ImpactA as they secure opportunities to invest in sustainable infrastructure that offers the potential for positive financial,social and environmental returns.”Laura MasonCEO,Legal&General Capital Climate natureand Climate and nature report

177、 Our material climate disclosures can be found on pages 45 to 48 of this report,with further information in our 2023 Climate and nature report(including our journey to net zero): Group PlcAnnual report and accounts 202318Strategic report18Influence Through the products we offer our clients.Through o

178、ur engagement with the real economy.Clean power infrastructure assetsWe have partnered with NTR,a leading renewable energy specialist,to launch the L&G NTR Clean Power(Europe)Fund,which aims to offer exposure to a diversified portfolio of clean power infrastructure assets with attractive risk-adjust

179、ed returns and positive environmental and social impact.Operate Through our operations.Through the businesses we control.Our housing businessesOur housing businesses have been helping us deliver on our transition plan.CALA Homes has been advancing the use of hydrotreated vegetable oil(HVO)to reduce

180、their operational carbon footprint and has developed a pilot net zero enabled home to test designs and technology we hope will deliver further reductions.IVG is continuing to design and develop energy efficient homes,in their drive to deliver net zero enabled retirement villages,for example by incor

181、porating heat pumps from our portfolio company,Kensa.Suburban Build to Rent(SBTR)beat its target to have 50%of homes transacted as gas-free.Invest Through reducing the intensity of our financed emissions.Through investing in the transition.Advanced Electric Machines(AEM)We have invested in AEM,an el

182、ectric vehicle motor manufacturer which does not use rare earth materials,significantly reducing environmental impact and reliance on geographically concentrated supply chains,without compromising on quality and performance.ImpactA GlobalWe have committed up to$100 million to women-led impact invest

183、ment advisory firm,ImpactA Global.This investment will be directed to debt financing for sustainable infrastructure in emerging markets,with a focus on addressing climate challenges and reducing inequalities.Legal&General Capital(LGC)became a significant minority shareholder of ImpactA Global when i

184、t launched in March 2023.Legal&General Group PlcAnnual report and accounts 202319Strategic reportGovernanceFinancial statementsOther informationOur climate actions19Strategic reportGovernanceFinancial statementsOther informationOur peopleOur customers sit at the heart of everything we doEmployees on

185、 our Consumer Duty Programme have worked hard together to implement the new regulations.They have undertaken targeted monitoring reviews across the Group to understand how the Consumer Duty management information will enhance customer outcomes,or where improvements are required.The ongoing collabora

186、tive work has enabled more accurate and effective communications,enhanced delivery of service and driven continuous improvement activity.This has been central to the work undertaken and its subsequent integration into our governance and business as usual activity across the teams.We aspire to empowe

187、r our employees to work together to create value for our customers,shareholders and the communities were here to serve.Working togetherLegal&General Group PlcAnnual report and accounts 202320Strategic reportCelebrating Retail annuities successWe had a record year in Retail annuity with premiums reac

188、hing 1.4 billion,an increase of 50%over 2022.This means weve provided guaranteed income tomore than 12,000 new annuity customers,supporting them in securing brighter financial outcomes for their retirement.Despite increased volumes and the challenges that brings,our teams continue to focus on helpin

189、g customers achieve their desired outcomes.We aim to offer exemplary service and for the sixth consecutive year,we have been accredited under the CCA for service excellence.CCA Awards recognitionOur UK Customer Service team was recently awarded Global Standard Accreditation from the Customer Contact

190、 Association(CCA)for the sixth year in a row.This highly regarded accreditation is a framework that assesses the reliability and effectiveness of customer service operations.A major milestone for our UK pension risk transfer teamWe have secured the benefits of 53,000 members of the Boots Pension Sch

191、eme in a history-making 4.8 billion transaction.This transaction is the UKs largest single buy-in by premium size and,for us,the largest single transaction by number of members.This significant achievement is a testament to the importance of our Legal&General behaviours being collaborative,purposefu

192、l and straightforward across divisions,businesses and external clients.We have shown this through excellent teamwork and the shared commitment to our clients and customers.13.7bnof global PRT business written in 202359.9bnof PRT written since the beginning of 2018I am proud that we have been able to

193、 work seamlessly across our insurance,legal,reinsurance,client services,finance,risk and investment management teams to deliver this excellent outcome.”Andrew KailLGRI CEOLegal&General Group PlcAnnual report and accounts 202321Our peopleStrategic reportGovernanceFinancial statementsOther information

194、1.7bnadjusted operating profit14.7bnstore of future profit Jeff DaviesChief Financial OfficerOver the period 2020 2024,our cumulative ambition is for:capital generation to significantly exceed dividends dividend to grow at 5%for the year to 2024 net surplus generation(including new business strain)t

195、o exceed dividends.8 9bncapital generation(progress to date:6.8 billion)5.6 5.9bndividends(progress to date:4.5 billion)0.8bnnet surplus generation over the dividend(2020 2023)Our business provides a number of attractive growth opportunities.We are a leader in the UK PRT market,driven by our scale a

196、nd competitive advantage in creating,sourcing and managing assets,complemented by a disciplined pricing approach.”Chief Financial Officers Q&ALegal&General Group PlcAnnual report and accounts 202322Strategic reportInvestingHow did Legal&General approach the volatile economic backdrop across 2023?Our

197、 diversified business model helped us to remain resilient despite the volatile economic environment.The store of future profit(CSM+RA)grew by 9%,while the adjusted operating profit result was flat year on year.Growth opportunities continued,with record volumes across PRT,Retail annuities and US prot

198、ection.The continued higher interest rate environment has created significant opportunity in the PRT and individual annuity businesses,demonstrated by the strong volumes.This was partially offset by the adverse impacts in the investment management business,where the lower fixed income asset values d

199、rove a decrease in asset management revenues and therefore lower year-on-year profit.You implemented IFRS 17 this year.How did the implementation go and how have analysts and investors responded to this new accounting standard?IFRS 17 is a new accounting standard effective from 1 January 2023.The st

200、andard impacts insurance contracts which,in our case,represents business written through our retirement and insurance businesses.LGIM and LGC are unaffected.As outlined in our half year 2023 presentation,the introduction of IFRS 17 only impacts the timing of profit recognition the economics of the c

201、ontract remain the same.There is no change to our dividend capacity(or appetite)and no change to Solvency II capital.The implementation has gone well and the response from analysts has been positive,as IFRS 17 introduces a more stable and predictable profit profile through the CSM release.For us,thi

202、s benefit emerges through the deferral of new business profit and demographic assumption changes to the CSM,which will then be spread and released into profit consistently over the lifetime of the contract.CSM has grown by 9%to 13.0 billion,with 1.2 billion added from new business in 2023,an increas

203、e of c.33%.CSM performance over 2023 reflects the high volume of PRT and protection business written,as well as favourable longevity assumption changes.How are you performing against your ambitions?We are making good progress against our five-year(2020 2024)ambitions.Against a cumulative ambition of

204、 8 9 billion,capital generation(Solvency II operational surplus generation)stands at 6.8 billion at the end of 2023.With the 2023 interim and final dividend growing by 5%,cumulative dividends declared stand at 4.5 billion at the end of 2023,against an ambition of 5.6 5.9 billion over the five-year p

205、eriod.The Board has agreed that it aims to continue to grow the dividend at 5%per annum out to the financial year 2024,which would add an additional 1.3 billion.We are also performing well against our ambition for Solvency II net surplus generation(which includes setting up capital for new business)

206、to cumulatively exceed dividends paid over 2020 2024.In total,we have created 0.8 billion surplus to the end of 2023.This has not been at the expense of ongoing investment in the business.For example,since 2020,we have written over 40 billion of PRT and individual annuities.We remain confident in ac

207、hieving our ambitions,with our businesses closely aligned to long term and strategic growth drivers,which we expect to persist regardless of any short-or medium-term market volatility.The PRT market looks set to continue to grow at pace.What is your outlook/ambition in this market over the medium te

208、rm?2023 has seen a large volume of PRT deals come to market given the favourable conditions.The high interest rates have led to materially improved funding positions for corporate pension funds,that is to say pension deficits have significantly reduced and,in many cases,have moved to a surplus posit

209、ion.This means that a growing number of corporate pension schemes are able to consider undertaking a de-risking transaction with an insurer much sooner than had been anticipated.We are a leader in the UK PRT market,driven by our scale and competitive advantage in creating,sourcing and managing asset

210、s with relationships across a large percentage of schemes.This is complemented by a disciplined pricing approach.With the acceleration of the UK PRT market,we increasingly consider our ambition of writing circa 8 10 billion of PRT a year as business as usual.In 2023,we wrote 12.0 billion of UK PRT b

211、usiness at a Solvency II margin of 7.4%.We are also seeing similar PRT market dynamics internationally where we wrote 1.7 billion in 2023.We surpassed$10 billion of total written premium with over 100 deals in the US,since our launch in 2015.Your Solvency II coverage ratio is strong how do you think

212、 about capital allocation?The strength of our capital position provides us with both a significant buffer,should interest rates fall,and the scope to continue both to invest,so as to ensure the long-term growth profile of the Group,and also to maintain a progressive dividend.We have a number of attr

213、active growth opportunities in which we could continue to invest.These opportunities include the acceleration of the PRT opportunity for LGRI,building out our asset origination capability in LGC,continuing to diversify and internationalise our investment management offering in LGIM,and enhancing our

214、 accumulation and decumulation platforms and customer experience in Retail.Legal&General Group PlcAnnual report and accounts 202323Strategic reportGovernanceFinancial statementsOther informationChief Financial Officers Q&AWe consider that the measures presented on these pages are KPIs.Key performanc

215、e indicators(KPIs)Guide to symbols used in these financial results Alternative performance measure(APM),see page 270 for definitions Key measure in the remuneration of executives,see pages 100 to 102 for definitionsPurpose:to measure the profit before tax of the Group.Despite a resilient adjusted op

216、erating profit performance of 1,667 million,broadly flat on 2022(1,663 million),profit before tax of 195 million(2022:939 million)was heavily impacted by longevity assumption changes and the unrealised mark-to-market impact of higher interest rates on asset valuations.Purpose:to illustrate the profi

217、tability associated with each share owned by our investors.Earnings per share reduced to 7.35 pence(2022:12.84 pence),primarily influenced by the negative investment variances noted above.Profit before tax m195m(2022:939m)Earnings per share p7.35p(2022:12.84p)Return on equity(ROE)%9.7%(2022:15.6%)Pu

218、rpose:to show how efficiently we are using our financial resources to generate a return for shareholders.Return on equity of 9.7%is lower than 2022,reflecting the negative impact of investment and other variances on our earnings.We remain confident in our ability to deliver resilient,organic growth,

219、supported by our strong competitive positioning in attractive and growing markets.”Jeff DaviesChief Financial OfficerLegal&General Group PlcAnnual report and accounts 202324Strategic report20192020202120222023Full year dividend p19.3720.3418.4517.5717.57Solvency II surplus bn9.27.47.39.98.2201920202

220、02120222023Solvency II coverage%22417517923618720202019202120222023Dec 13 Dec 14 Dec 15 Dec 16Dec 18Dec 17Dec 19 Dec 20 Dec 21 Dec 22 Dec 23FTSE 100 FTSE 350 Life Legal&GeneralAs at 31 December 2023150%50%100%0%-50%Total shareholder return%Purpose:To measure the total return to shareholders,includin

221、g dividends and share price movements,over time.In another challenging year for UK indices,the total shareholder return(TSR)return of+8%outperformed the FTSE 100 index(+6%)and the FTSE 350 Life Index(-9%).Over a ten year period,the TSR performs well(+111%)against the FTSE 100 index(+68%)and the FTSE

222、 350 Life Index(+5%).+8%(2022:-12%)Purpose:to show the level of distribution to shareholders.Purpose:to demonstrate the surplus capital position over the solvency capital requirement.Purpose:to demonstrate the balance sheet strength of the Group.The Board has recommended a final dividend of 14.63 pe

223、nce,giving a full year dividend of 20.34 pence,up 5%from the prior year(19.37 pence).This is consistent with our stated ambition to grow the dividend at 5%for the year to 2024.Solvency II surplus of 9.2 billion(2022:9.9 billion)over our capital requirement demonstrates the continued strength of our

224、balance sheet.The Solvency II coverage ratio reduced to 224%(2022:236%),primarily influenced by record volumes of new business and the impact of mark-to-market asset movements as a result of continuing higher interest rates.Legal&General Group PlcAnnual report and accounts 202325Strategic reportGove

225、rnanceFinancial statementsOther informationKey performance indicators(KPIs)We pay the right tax,at the right time and in the right place in line with our published tax strategy and wider commercial purpose.”We aim for our tax affairs to be well governed,transparent,and fair to our customers,sharehol

226、ders,and the public.You can read more about our tax strategy,our governance,and what taxes we pay in our Tax supplement,which is approved by the Board and can be found here: reviewOur 2023 tax positionWe have a tax credit for the year which includes a material one-off tax credit arising from the int

227、roduction of a new Bermuda corporate income tax regime.This relates to the recognition of a deferred tax asset on inception of the new tax regime and will unwind against future taxable profits in Bermuda.The tax credit for the year excluding this one-off credit is 27m.This is explained by the varyin

228、g rates of tax that we pay on our businesses in different territories and the mixture of profits and losses across those territories.Further explanations of our 2023 tax position can be found in our Tax supplement.The tax environmentWith the global economic outlook remaining uncertain as people adap

229、t to higher interest rates and inflation,governments remain focused on both raising revenues and promoting growth across the economy,and the tax regime has a role to play here.In the UK,weve seen a number of changes with these aims in mind including the super deduction being replaced with full expen

230、sing of qualifying plant and machinery,changes to the R&D regime and the Lifetime Allowance Notification pension rules,and reductions in the rate of National Insurance for employees.At the same time,the corporate income tax rate has been held at 25%and personal tax thresholds remain frozen.These cha

231、nges have an impact across our businesses,our investments,our employees and our customers.New accounting standards,tax legislation and tax reporting requirements continue to add to the complexities that businesses face.The introduction of any new taxes or levies must be clear in its aims and what it

232、 is setting out to achieve.This is particularly important where the tax regime is being used to target behavioural change,for example where green taxes are being introduced to incentivise businesses and wider society to adopt environmentally friendly behaviours.We continue to contribute to discussio

233、ns and research on the tax landscape,prospective changes and active consultations on new legislation and guidance,with a view to the impact across society,our customers and wider stakeholders.We recognise that governments,customers,investors,and other stakeholders have justifiably high expectations

234、for compliance,risk management and transparency.Our approach remains consistent with a focus on engaging with all our stakeholders and supplementing our disclosures on tax where we believe this will add value.Our purpose is to build a better society and make a positive difference to peoples lives wh

235、ile delivering value for our shareholders.We believe that paying tax is part of the impact we have on the economy and society and that the tax regime should endeavour to balance the needs of all stakeholders across society,whilst ensuring that policies do not create unintended consequences.We monito

236、r risks and complexities across all the territories in which we operate,to ensure we pay the right tax,at the right time,in the right place,consistent with our tax strategy.Further detail on our main risk areas and how we manage those risks can be found in our Tax supplement.The new global minimum t

237、ax regimeDuring the year,the UK Government enacted legislation to apply a global minimum tax rate of 15%to multinational businesses headquartered in the UK,under the Model Rules agreed by the Organisation for Economic Co-operation and Development(OECD).These rules apply from 1 January 2024 and will

238、apply to all of Legal&Generals businesses globally.In December 2023,Bermuda enacted a new corporate income tax regime that will apply from 1 January 2025,with a headline rate of 15%.These are all new rules and additional guidance on the implementation of the new regimes and their interaction is expe

239、cted and will be kept under review for any impact.The Group is expected to be liable to UK top-up tax in 2024 and Bermuda corporate income tax from 2025 in respect of profits arising in our global reinsurance hub in Bermuda.Changes to accounting standards impacting the tax we payOn 1 January 2023,a

240、new global accounting standard for insurance contracts,IFRS 17,came into effect.IFRS 17 is an accounting change only,which does not change the underlying economics of our insurance contracts.It does not change our strategy,capital generation,solvency or dividend capacity.The introduction of this new

241、 accounting standard impacts the tax we pay in the UK.This is because the UK tax regime is based on IFRS results for the companies in our Group and we have previously paid tax based on our IFRS 4 results.At transition on 1 January 2022,shareholders equity reduced by c.5.5 billion.Of this,5 billion r

242、eflects the value taken to the balance sheet under IFRS 17 as part of the CSM,which is expected to emerge as future profit.The remaining balance relates to the implementation of IFRS 9.The tax regime requires the reduction in equity on transition to IFRS 17 to be treated as a tax credit,which is spr

243、ead over 10 years.The credit represents the tax that has effectively been paid in prior years on IFRS 4 profits that,under IFRS 17,will now emerge in the income statement in future years.This ensures the same profits are not taxed twice.As a result of the above,our tax payments over the next 10 year

244、s will be reduced.Tax supplementOur Tax supplement is available on our Group website.See: StevensChief Tax OfficerLegal&General Group PlcAnnual report and accounts 202326Strategic reportTotal tax contribution m8358201,1214611,000838818811781782700565201920182020202120232022Total taxes paidTotal taxe

245、s collected2004006008001,0001,2001,4001,6001,8001,582mIn 2023,our total tax contribution was 1,582 million(2022:1,838 million)of which 93%(2022:94%)arose in our UK businesses and 7%(2022:6%)in our overseas businesses.Total tax contribution in 2023461m0m Profit taxes178m Withholding taxes suffered in

246、 the UK69m UK property and other taxes70m UK irrecoverable VAT and premium taxes100m UK payroll taxes37m Other overseas taxes7m Overseas profit taxTotal taxes paid568m UK PAYE deducted from policyholders13m UK property and other taxes199m UK VAT and premium tax274m UK payroll taxes67m Overseas taxes

247、Total taxes collected1,121mOur total tax contribution over the last six yearsThe table below shows our total taxes paid and collected over the past six years.For a breakdown of how we calculate these numbers,please refer to our Tax supplement.Total tax contributionOur total tax contribution is the a

248、mount of tax that we pay together with the amount of tax that we collect on behalf of our employees,suppliers,customers and policyholders.We paid 461 million(2022:838 million)of tax and collected 1,121 million(2022:1,000 million).Our total tax contribution of 1,582 million is lower in 2023 than in p

249、rior years.This reduction is primarily due to a reduction in UK corporation tax payable arising in 2023 as a result of both larger adverse investment variances in the year and the release of the tax credit arising on IFRS 17 transition,to be spread over 10 years.Legal&General Group PlcAnnual report

250、and accounts 202327Tax reviewStrategic reportGovernanceFinancial statementsOther informationBusiness reviewCapital markets eventFor full details of our externalambitions,see our capitalmarkets event: in reviewOur unique,powerful and highly synergistic business model has delivered another strong year

251、,enabling our businesses to capitalise on significant growth across our chosen markets.Committed to inclusive capitalism,we are continuously taking action to protect the retirement income of millions and use the power of pensions to generate socially beneficial infrastructure and create opportunitie

252、s for the next generation.With purpose-led expertise across asset origination(LGC),asset management(LGIM)and retirement and protection solutions(LGRI and Retail),alongside our scale and long-standing relationships,we remain on track to achieve our five-year ambitions,and are confident in our ability

253、 to deliver resilient,organic growth.OutlookAs a leading global player in the pension risk transfer(PRT)market,our institutional retirement business(LGRI)is uniquely positioned to offer holistic,multinational pension de-risking solutions.Remaining disciplined in pricing and value creation,we demonst

254、rate our market leadership by executing record-breaking,innovative transactions,and we wrote our largest deal to date this year.We have now surpassed$10 billion of international PRT,and will continue to leverage our brand,scale and asset origination capabilities to capitalise on the large global pip

255、eline.Our capital investment business(LGC)is committed to deploying shareholder capital in a range of underserved areas of the real economy which are backed by long-term structural trends.In line with our ambition,we remain focused on seeking incremental opportunities in clean energy and later livin

256、g,expanding our international footprint and generating long-lasting value for society.Building on our success to date,our partnership with Ancora is growing,while our investment with L&G NTR Clean Power Fund will help drive Europes decarbonisation and support its energy security agenda.Underpinned b

257、y the impressive growth to date of Pemberton,we are on track to achieve our third-party AUM ambition of 25 30 billion by 2025.The ambition of our investment management business(LGIM)is to create a better future through responsible investing.Upheld by three strategic pillars:modernise,diversify,and i

258、nternationalise,we are committed to raising standards in addressing the environmental and social challenges arising from a rapidly changing world.Alongside its core role in the Groups successful synergistic business model,we remain dedicated to broadening our investment offering,expanding our global

259、 footprint and improving our operational effectiveness to deliver benefits at scale.With a mission to reimagine our world to create brighter financial futures,our Retail business harnesses technological innovation to provide our customers with peace of mind.Leveraging operational strength and deep d

260、istribution relationships,we continue to widen our product and pricing proposition to ensure we can be there when it matters most.We are well-positioned for long-term growth,after delivering a landmark year for annuities,and record-setting transaction volumes in the US.Continuing to share our succes

261、s with our shareholders,customers and society.13.7bnglobal PRT new businessvolumes 378.1bnassets managed for our clients are linked to ESG8.5%growth in our alternative asset portfolio412mprotection new businesspremiumsLegal&General Group PlcAnnual report and accounts 202328Strategic reportInstitutio

262、nal retirement2023 key activitiesIn 2023,we demonstrated how our solutions-focused expertise can help large pension schemes to de-risk at scale,transacting the Boots and British Steel schemes the UKs largest individual transaction and fully insured scheme respectively as well as two schemes with Uni

263、ted Utilities.Together,these made up two thirds of our total volumes and reflect the strength of our long-standing client relationships and tailored client solutions.Excellence in customer serviceWe pride ourselves on our commitment to excellent customer service and have attained the Customer Contac

264、t Associations(CCA)Global Standard Accreditation for the sixth consecutive year.In our most successful year to date,we were shortlisted for eight awards and won six at the CCA Awards,including Great Places to Work and 5 Years of Excellence.New businessDuring the year,we wrote PRT new business premiu

265、ms of 13.7 billion across the UK,US,and Canada,including record volumes of 12.0 billion in the UK.Along with LGIM,we develop strong,long-lasting relationships with pension schemes to support them through their de-risking journey.We have a proven track record of executing ground-breaking transactions

266、 for very large pension schemes,including through pre-agreed umbrella contracts,while also preserving a strong presence at the small and mid-sized end of the market.4.8 billion full buy-in for the Boots Pension Scheme We agreed a 4.8 billion full buy-in with the Boots Pension Scheme.This secured the

267、 benefits of all 53,000 members of the Scheme,making it the UKs largest single transaction of its kind by premium size and our largest by number of members.Legal&General has a long-standing relationship with Boots,having provided investment management services to the Scheme for over 20 years.This tr

268、ansaction also represented another innovative step forward in pension de-risking by combining investment and insurance expertise to find solutions for the Schemes illiquid asset holdings.As a result,the Scheme can achieve the certainty of a transaction and maximise the value of its assets by transfe

269、rring them to us.2.7 billion British Steel Pensions Scheme becomes largest in UK to fully insure its members benefits In 2023,we completed a further transaction(four in total since November 2021)with the new British Steel Pensions Scheme(BSPS),where the remaining 40%of liabilities were insured.We ha

270、ve now insured 7.5 billion of BSPSs liabilities,securing the benefits of c.67,000 members.Over an 18-month period,a deficit of c.800 million was closed by executing transactions quickly when there were favourable market conditions.By completing this transaction,BSPSs trustees are now able to make ad

271、ditional payments to members.Andrew KailChief Executive Officer,Legal&General Retirement InstitutionalCEO introductionWe transacted record global volumes in 2023,including our largest ever deal.We are seeing continued growth in the US,where total volumes written to date have now passed$10 billion.We

272、 have developed innovative solutions to support long-standing clients to achieve their de-risking goals,securing 33 transactions in the UK totalling 12.0 billion,nine in the US totalling 1.5 billion and a 0.2 billion transaction in the Canadian market.We provide income and security in retirement to

273、more than 600,000 customers,while allowing businesses to thrive by taking risk off their balance sheets.With the UK PRT market expected to exceed 50 billion in 2024 and a significant global PRT pipeline,our combination of long-standing expertise,continued innovation and uniquely global capabilities

274、positions us well to capitalise on this opportunity.Growth drivers Ageing demographics.Investing in the real economy.Addressing climate change.Institutional retirement sales bn13.79.57.220212022202313.7bnWe achieved strong sales of 13.7 billion in 2023.We transacted 43 deals globally,achieving 12.0

275、billion in premiums in the UK,whilst also growing our presence in the US market,where we wrote premiums of 1.5 billion.Our reinsurance hub also wrote 0.2 billion of premiums.Premiums shown exclude longevity insurance.Net promoter score+70+71+73202120222023+70Net Promoter Score(NPS)is a metric that i

276、s used to measure customer experience on a scale of-100 to+100.We hold a 12-month rolling NPS score of+70 which is regarded as a world-class level of service in the industry,with the average UK score for Banking and Financial Services being+34.We have maintained this world-class level of service for

277、 four consecutive years while dealing with adverse economic conditions,demonstrating strong operational resilience and commitment to our customers.Strategic reportGovernanceFinancial statementsOther informationLegal&General Group PlcAnnual report and accounts 2023Institutional retirement29291.8 bill

278、ion buy-in with United UtilitiesWe agreed a 1.8 billion buy-in with the trustees of two pension schemes sponsored by United Utilities,an existing LGIM client,insuring two thirds of their liabilities.We provided a bespoke price lock to the Schemes assets,which gave price certainty for the trustees wh

279、ile the transaction terms were agreed.500 million buy-in with Deutsche Bank Pension SchemeIn November,we completed a 500 million buy-in with the Deutsche Bank(UK)Pension Scheme,which secured the benefits of around 2,000 members.This was the Schemes third buy-in,extending coverage to include deferred

280、 members for the first time,and taking the total buy-in to c.1.5 billion.The Scheme made use of the existing umbrella contract with Legal&General,allowing the buy-in to be transacted quickly and efficiently.In February,we agreed a buy-in with the Amey Services section of the Citrus Pension Plan,tota

281、lling c.6.5 million,which secured the benefits of 70 members.This transaction demonstrated our ability to carry out fast and efficient pricing in a busy market as the transaction was completed within eight weeks of the trustee sharing the initial data with us.In 2023,we completed 22 transactions und

282、er 100 million,which secured total premiums of 391 million,underlining our commitment to schemes of all sizes.US PRT dealsLegal&General Retirement America(LGRA)reached another milestone this year by crossing$10 billion in total business written and over 100 deals since its inception in 2015.As our U

283、S PRT business continues to grow,so does our team,with a new office in Stamford,Connecticut allowing a larger team and greater capabilities.332 million buy-in with Cable and Wireless Superannuation FundWe secured the benefits of around 1,800 members as a result of a 332 million buy-in with the Cable

284、 and Wireless Superannuation Fund.This buy-in marked the funds third and final transaction with Legal&General,following buy-ins in 2017 and 2019.It is the culmination of a process of reducing investment and longevity risk,which began in 2008.With support from Legal&General,the Trustee of the Fund wa

285、s able to react to changing market conditions and transact at an opportune time.Opportunities for small pension schemesClose to 75%of UK DB pension schemes have assets of 100 million or less and there is strong demand from these small schemes.We have a streamlined small scheme proposition to make th

286、e process more efficient for this area of the market.Institutional retirement continuedCustomer serviceExcellence in customer service is one of the core features of our proposition,and we typically find that it is a key consideration for schemes transacting with us.We strive for outstanding service

287、levels for our customers,issuing 98%of customer communications within five days of the request.We are committed to developing our people in the customer service area,taking on apprentices in 2023 to encourage customer-focused careers.We continually seek opportunities to listen,engage and improve our

288、 service to meet customer needs.This year we welcomed over 2,500 customers to our flagship customer event at BBC Gardeners World Live,and hosted two customer roadshows themed around wellbeing.Adjusted operating profit m886m(2022:807m)We achieved a strong adjusted operating profit of 886 million driv

289、en by releases of the contractual service margin(CSM)of 591 million and the risk adjustment(RA)of 119 million.Understanding the risks Taking on the responsibility for pension scheme liabilities and providing income in retirement transfers pension-related risks to Legal&General.In particular,we take

290、on the risk of higher than expected life expectancy,or that we experience defaults in the investments backing our obligations.We remain vigilant to the long-term trends in longevity in our pricing and use reinsurance to manage selected risks.Working with our investment management businesss credit an

291、d property experts,we continuously assess default risks in our investment portfolio,managing exposures to sectors that may be at risk in the prevailing economic environment and,where appropriate,trading out of positions.Legal&General Group PlcAnnual report and accounts 202330Strategic reportIn 2023,

292、we completed a total of nine deals totalling$1.9 billion,securing the retirement of over 27,000 annuitants,including an individual transaction of nearly$800 million,which is our largest to date.Of the nine deals transacted,four were with existing clients,reflecting the financial security and service

293、 excellence we provide to sponsors and pension plan members.As lead administrator,LGRA also completed two transactions in partnership with Reinsurance Group of America(RGA),insuring c.$350 million of a total c.$1 billion premium and jointly protecting the retirement benefits of more than 6,000 membe

294、rs.Other International PRT dealsIn the Canadian market,we have executed a reinsurance transaction of CAD$350 million with a Canadian regulated insurer which brings our total premium to date to over CAD$1.5 billion in Canada.There continues to be significant opportunity in the US and Canadian markets

295、,and we are well positioned to execute deals using our global pensions de-risking expertise.We formed a strategic relationship with Lifetri in the Netherlands which presents an exciting opportunity for Legal&General to offer PRT expertise and secure the benefits of more international customers.Our w

296、ider contributionWe have a major impact on wider society through the financial security we provide to pension scheme members and the capital we direct to investment assets,but also through the direct contribution our people make to the community.For example,this year LGRA held its first community da

297、y with teams in Maryland and Connecticut volunteering in their local communities to plant trees and clean up a park in partnership with the Chesapeake Bay Foundation.Residential investment in Northern Ireland This year,we funded a 150 million residential development in Belfast,committing to the larg

298、est real estate investment in the region for 20 years which will fund the development of 627 new homes.This investment will help address soaring rental demand and drive economic growth in the region.On completion,the build-to-rent scheme will be managed by LGIM Real Assets as we continue to support

299、Legal&Generals commitment to levelling up towns and cities.Leeds city centreIn April,we agreed to invest 140 million for a residential development in Whitehall Riverside in Leeds,committing to the delivery of 500 new homes which will again be managed by LGIM Real Assets.This marks the third scheme f

300、unded by Legal&General in Leeds and will bring the number of new rental homes it has delivered in the City to over 1,000.The development will help residents benefit from growing employment opportunities and strong transport links in the area,showcasing our commitment to delivering positive social ou

301、tcomes.Development and conservationThis year,we invested in a number of impactful initiatives including a senior secured loan to the Republic of Senegal,where funding will span 45 development projects around health,education and transportation.We invested in a debt-for-nature swap(Gabon blue bond)to

302、 fund marine conservation in Gabon,aimed at conserving the countrys biodiversity and environmental capital.We also helped fund the worlds largest debt-for-nature swap which is linked to the conservation of the Galapagos Islands,where we were the largest investor in the deal.OutlookThe UK PRT market

303、continues to grow,and we expect increasingly large transaction sizes in the future,with projections of 360 billion of new business to be written over the next five years.As we proceed to execute deals globally,we will utilise our PRT expertise to identify and transact on favourable deals both in the

304、 UK and abroad as we leverage our international experience and long-term relationships.Investment solutions for large schemesWorking alongside LGIM,we have developed a range of solutions for pension schemes with illiquid asset holdings that are looking to secure a bulk annuity.This includes acceptin

305、g assets as part of the premium payment or deferring part of the payment to align with asset sales to provide the potential customer with the most flexible arrangement.In 2023,we were able to assist four pensions schemes with illiquid assets using these solutions,allowing them to secure full buy-in

306、transactions within their preferred time frame.We are continuing to see an unprecedented acceleration in demand,driven by more pension schemes being closer to buyout than ever before.Against this backdrop,we have posted a record year with 13.7 billion of global PRT written.”Andrew KailChief Executiv

307、e Officer,Legal&General Retirement InstitutionalLegal&General Group PlcAnnual report and accounts 202331Strategic reportGovernanceFinancial statementsOther informationInstitutional retirementDirect investments bn 4.14.53.42021202220234.5bnAs we continued to strengthen our capabilities across a diver

308、sified range of alternative assets,our direct investment portfolio grew by 8.5%in 2023 to 4.5 billion(2022:4.1 billion).Adjusted operatingprofit m510509461202120222023510mDespite the challenging market conditions,we achieved operating profit of 510 million in 2023,flat versus 2022(509 million).appli

309、cation of cutting-edge new science,which is anticipated to make a difference in future public health and quality of life.We continue to build on our track record of place-based regeneration through ECF,a joint venture with Homes England and Muse,and also with Oxford University Development(OUD),a joi

310、nt venture with the University of Oxford.With the land provided by Oxford University and the investment and development management skills of Legal&General,the partnership aims to drive investment into world-leading innovation to attract and retain talent on a global playing field.OUD expects to have

311、 generated over 1.5 million square feet of life science and university space and 3,000 new homes for the Oxford community.Marking a significant milestone for the partnership during 2023,the 270,000 square feet Life and Mind building and the two 135,000 square feet new Begbroke Science Park buildings

312、 reached their halfway point in construction.Begbroke Science Park will complete in Q1 2024.These three buildings will provide asset backing for our annuities pipeline.2023 key activities In 2023,LGCs alternative asset portfolio grew as we continued to deploy capital into new and existing investment

313、s in the UK and internationally,further strengthening our capabilities across a diversified range of alternative assets that are underpinned by structural growth drivers.Through our ability to manufacture bespoke assets tailored to create attractive long-term investments,our unique asset origination

314、 capabilities continue to be a key differentiator for our Institutional Retirement business when competing in the PRT market.Significant third-party capital was secured by our partnership with Bruntwood SciTech,the UKs leading specialist property provider,as well as Kensa,the UKs leading ground sour

315、ce heat pump provider.Specialist commercial real estateAcross the UK and the US,we are investing in specialist commercial real estate(SCRE),including laboratory and flexible best-in-class facilities for innovation-focused high-growth start-ups,scale-ups and global businesses in the life sciences and

316、 technology sectors.In 2023,Bruntwood SciTech,our joint venture with Bruntwood,secured 500 million of additional investment and welcomed Greater Manchester Pension Fund(GMPF),the UKs largest local authority pension fund,to the partnership.The funds will be used to expand and redevelop existing scien

317、ce and technology campuses and city centre innovation hubs across the UK,facilitating the UKs ambition to become an internationally recognised science and technology superpower by 2030.LGCs 50:50 partnership with Ancora,a US real estate developer and asset manager dedicated to driving life sciences,

318、research,and technology growth in North America,continues to expand with three sites across the US,providing a valuable ecosystem for universities including Yale,Brown and Georgia Tech,all of which are within close proximity to the sites.Additionally,construction of a new 210,000 square feet life-an

319、d-health sciences building in Rhode Island is underway.When complete,it will provide essential space for public health services,advancing the states critical public health and safety goals.It will also provide laboratories for the development and Laura MasonChief Executive Officer,Legal&General Capi

320、talCEO introductionOur purpose-driven capital investment business,LGC,has long been investing in alternative asset classes and partnerships that drive superior financial returns with positive social and environmental outcomes.As we look to grow our business in the UK and internationally,we will cont

321、inue to deploy catalytic capital,alongside an increasing number of third-party partners.These partners will gain access to our unique pipeline of assets and investments that create long term,secure income streams,underpinned by societal demand.Growth drivers Ageing demographics.Globalisation of asse

322、t markets.Investing in the real economy.Welfare reform.Technological innovation.Addressing climate change.Capital investmentLegal&General Group PlcAnnual report and accounts 202332Strategic reportLGC capital markets and nature reportOur 2023 Climate and nature report is available on our Group websit

323、e.See: capital bn18.116.612.920212022202318.1bnOur third-party capital grew to 18.1 billion in 2023(2022:16.6 billion)as we further expanded our portfolio alongside like-minded,purpose-driven capital partners.Understanding the risks Our early-stage investments through Legal&General Capital are inher

324、ently exposed to the risk that they do not perform as anticipated.Where we undertake construction activity,we are also directly exposed to health and safety,and environmental risks.We seek to closely manage our real estate and housing market risk exposures,including development costs and changes in

325、property valuations.Site health and safety is a core focus area across all our property development and operating activities.Digital InfrastructureSince LGCs initial investment in 2019,Kao Data,our specialist developer and operator of high-performance data centres,has grown from a single-site data c

326、entre to a multi-site platform,with three operational sites.In 2023,Kao Data secured a further site in Greater Manchester for redevelopment.As a compelling strategic growth opportunity,we have provided further investment into Kao Data,to facilitate its plans to scale across the UK.In January 2024,Ka

327、o Data secured a 206 million debt facility,provided by Deutsche Bank.This further demonstrates its growth from a start-up to a scale-up,its industry-leading reputation,and both the scale and demand for world-class infrastructure that is engineered for AI.Clean energyWe see a huge market opportunity

328、for reliable and effective solutions to deliver the transition to a low-carbon economy.Our focus is on selective investing in attractive growth equity and clean technology businesses where we have identified the potential for rapid and substantial growth alongside investment into both new and establ

329、ished clean energy infrastructure assets.As of 31 December 2023,we had invested over 400 million into clean energy infrastructure and technology.In May 2023,Kensa(the UKs leading manufacturer and installer of ground source heat pumps),secured an additional 70 million investment and welcomed Octopus

330、Energy as partners alongside LGC.Recognising the market opportunity and social benefits that decarbonising residential real estate presents,we have now committed 49 million in a breadth of investments from reducing construction emissions to the technology and support needed to retrofit existing hous

331、ing stock.In our clean energy infrastructure portfolio,we continue to scale our strategic partnership with NTR,leveraging LGIMs distribution capabilities and NTRs sector expertise to raise and deploy significant capital into new and existing renewable energy projects.We provided seed capital to back

332、 the first close of the LGIM-managed L&G NTR Clean Power(Europe)Fund,which successfully raised 390 million in April 2023.This deployment will accelerate the construction and operation of clean power infrastructure,facilitating Europes decarbonisation and energy security.Alternative FinanceVenture ca

333、pitalOur venture capital platform remains committed to investing in innovation and growth companies across the UK and internationally through our Fund of Funds and direct investment programmes as well as our venture capital platform.Through these,we have now provided funding to c.700 businesses.Our joint venture with Bruntwood stands as a pivotal initiative to reshape the UKs innovation landscape,