Legal & General Group Essay

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Legal & General Group is one of the United Kingdom’s leading  financial  services companies.  According  to the  Fortune  Global 500 ranking  for 2007, Legal & General Group is the ninth-highest ranked insurance company, although ranked only 162 overall. The company’s ordinary shares (stock) appear in the Financial Times Stock Exchange 100 Index (in fact, the company is among the top 50 most traded companies).

The company, with headquarters in London, offers various types of insurance  as well as providing pensions. Although  British-based,  Legal & General  has an interest  in various European  countries  as well as in  the  United  States  (Metropolitan Life Assurance Company  of New York was acquired  in the 1930s). It  withdrew  from  Australia  in  1998. Nevertheless, approximately  90 percent  of Group  operating  profit (£1,233 million in the last available year) comes from its United Kingdom activities. In addition to its own direct sales through  its consultants,  the company (as is common in the United Kingdom insurance market) sells its products through its association with numerous banks  and  building  societies. Some interesting statistics regarding the company are that 5.75 million people worldwide rely on Legal & General for their life insurance, pension, investments, or general insurance plans; and almost £250 billion is invested on behalf of investors, policyholders, and institutions.

Personal  financial products  sold by the company include, on the insurance side, annuities, endowments,  and  household,  auto,  health,  and  life insurance. But the  company  also offers various types of investments  (unit trusts  [mutual  funds], investment trusts, and investment bonds) and arranges mortgage finance. This last activity is merely one aspect of Legal & General’s interest  in  the  property  market,  since the  company  also operates  one  of the  largest  (110 branches operating nationwide) estate agency/letting franchise businesses in the United Kingdom. Pension interests span pension fund investment management services and group pension bulk purchase annuities.

The company’s history is somewhat unusual. Founded  in  1836 (the  date  appears  in  the  corporate logo) by six lawyers in a coffee shop in the City of London (the London Stock Exchange had similar humble beginnings), the business was originally registered as a society, and the fact that its membership was restricted  to  members  of the  legal profession was reflected in its chosen name—the New Law Life Assurance  Society. When  policies became  available to the general public (even if membership  remained in the  same  restricted  hands  as before),  the  name changed to Legal & General Life Assurance Society, and it became a wholly-owned subsidiary of Legal & General Group  plc in the 1970s (following a United Kingdom  corporate  law initiative  aimed  at making clearer the distinction  between “public” [henceforth a plc] and “private” companies).

In 1999 Legal & General announced  an ambitious plan to link up with NatWest (formerly National Westminster) Bank in what would, had it been successful, have been the United Kingdom’s first “bank assurance” company. However, though market reception to the deal was so poor that the initiative had to be abandoned (NatWest was subsequently taken over by the Royal Bank of Scotland), the subsequent acquisition of the Scottish Widows’ Life Assurance Society by another  United  Kingdom High Street  bank (this time Lloyds/TSB) indicated there was nothing wrong with the underlying concept per se.

Like many  other  companies,  Legal & General  is today anxious to establish  its sustainability  credentials. It is thus a member  of the Dow Jones Sustainability  World   Index,  the  FTSE4Good  Index,  and (since  2006) the  Dow Jones Sustainability  STOXX Index. The company has also been placed in Business in the Community’s Corporate  Responsibility Index and was second in its sector in the 2006 Business in the  Community   Index.  Legal & General’s  marketing paper now exceeds half recycled content  (saving over 10,000 trees per year) and the company’s corporate  social responsibility  engagement  program  now includes  social  and  ethical  issues,  and  supporting guidelines, to influence its key suppliers. More than one in eight employees now contributes to the company’s Give As You Earn charity support scheme.

Legal & General has been judged Best Life Assurance  Provider  (by Professional Advisor  magazine); Life Assurance  Provider  of the  Year (in the  Financial Advisor Life & Pensions Awards); and Best Service Provider (the Lifesearch Protection Awards). The company attributes  its outstanding success to its clear and consistent strategy and … a wide range of value-for-money  products  backed by strong technical skills, excellent administration, multi-channel distribution  and a customer service ethic.


  1. Legal & General Group plc, Annual Reports and Account (2008);
  2. Joanne O’Connor, “Legal & General in Review of its UK External Advisers,” Lawyer (v.18/34, 2004).

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