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nvestors might want to work out the influence of latest accounting guidelines subsequent week as three of the nation’s greatest insurers report their monetary outcomes.
It may even be the ultimate set of half-year outcomes for Legal & General boss Sir Nigel Wilson , who is ready to depart later in 2023.
“Sir Nigel steps down at the end of this year, before the end of the five-year spell, but he will presumably be looking to go out on a high after almost 12 years in charge and these interim results will be initially benchmarked against the (company’s) 2020-24 plan,” mentioned Russ Mould and Danni Hewson at funding platform AJ Bell.
The plan means dividends ought to develop by between 3% and 6% a 12 months, earnings per share ought to rise extra quickly, and capital era ought to attain between £8 billion and £9 billion.
Analysts expect to see value hikes assist the highest line in subsequent week’s half-year outcomes, with markets anticipating double-digit progress in gross written premiums
Whether failing towards these benchmarks will dent the long run hopes of Sir Nigel – who has lately indicated he could be fascinated about a political profession after he steps down – stays to be seen.
Matt Britzman, an fairness analyst at Hargreaves Lansdown , mentioned that Legal & General can be significantly impacted by new accounting guidelines for insurance coverage corporations.
“The key difference is that profits from the insurance business are stored in the balance sheet and released over time, causing a hit to reported profits in the short term compared to the old regime,” he mentioned.
He added that rising rates of interest are serving to the elements of the enterprise. It is predicted to report an working revenue of £834 million.
But Legal & General’s outcomes on Tuesday are solely one among many from insurance coverage corporations. Aviva and Admiral Group will report on Wednesday.
Mr Britzman mentioned: “It’s safe to say markets were unimpressed by Admiral’s full-year results back in March.
“Profits missed analyst expectations as higher claims and an increase in the cost of servicing them weighed on performance.
“But, broadly speaking, Admiral’s performance in this tricky environment has been strong to date compared to peers.
“Analysts are expecting to see price hikes support the top line in next week’s half-year results, with markets expecting double-digit growth in gross written premiums.”
