Legal & General (L&G) is expected to write £50-65bn in pension risk transfer (PRT) deals in the UK by year-end 2028, the group's refreshed strategy and financial targets have revealed.

The strategy suggested that the group is "well placed to seize the significant institutional retirement opportunity" in the UK, arguing that the addressable market is "significant", with only 10 per cent of the £6.6trn in defined benefit pension assets in the UK, the US, Canada and the Netherlands already transferred to insurers.

It also noted that volumes in the UK are expected to average £45bn per annum over the next decade, up from c£25bn per annum since 2018.

Given this demand, the group said it is expecting to achieve a 5-7 per cent compound annual growth rate in institutional retirement operating profits from 2023 to 2028.

Additionally, it is expected to write £50-65bn of UK pension risk transfer business with a capital strain of less than 4 per cent by 2028.

L&G also announced it will create a single asset management division, by merging Legal and General Investment Management (LGIM) and Legal and General Commission, which will be aimed at deepening their capabilities in both public and private markets.

It aims to grow in public markets by scaling its in-house and origination platform capability and increasing revenue margins.

In addition to this, the group said that it will invest to drive growth in retirement and savings, recognising the opportunities presented by the growth in defined contribution and decumulation assets, and the corresponding customer need for support and guidance.

In particular, the group is targeting a 6-8 per cent compound annual growth rate in its retail operating profits by 2028, looking to generate £40-50bn of workplace net flows.

In a leadership update, Michelle Scrimgeour announced she will step down as LGIM CEO, although the group has already started a global search for a new CEO.

Scrimgeour will remain in her role until the new CEO is appointed and will lead the transition and establishment of its new division with Laura Mason, who has been appointed CEO of private markets.

Commenting on the upcoming changes, L&G Group CEO, António Simões, said: “By seizing the opportunity in Institutional Retirement while investing to scale and deepen our capabilities in Asset Management and Retail, we will evolve our business to better address society’s changing investment needs, and shift towards fee-based earnings at higher returns on capital.”

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