AM Best Affirms Credit Ratings of Legal & General Group Plc and Most of Its Rated Subsidiaries

AM Best has affirmed the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) of the non-operating holding company, Legal & General Group Plc (L&G) (United Kingdom). Concurrently, AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term ICRs of “aa-” (Superior) of L&G’s rated subsidiaries, Legal and General Assurance Society Limited and Legal & General Reinsurance Company No. 2 Limited. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect L&G’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favourable business profile, and appropriate enterprise risk management. The ratings of L&G’s rated subsidiaries factor in their strategic importance to L&G and their integration within the group.

L&G’s balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), at the strongest level. The group’s risk-adjusted capitalisation includes meaningful contribution from economic capital embedded in its long-term business and equity credit for hybrid debt, which are considered of weaker quality in the capital structure. The assessment also factors in the group’s excellent financial flexibility, through its access to capital markets, coupled with good fungibility of capital.

L&G has a track record of strong operating performance, evidenced by a five year (2018-2022 - under IFRS 4), weighted average return on equity (ROE) of 19.6%. The results of the institutional retirement and the retail divisions have been the main drivers of returns over that period. Overall performance in 2024 remained adversely impacted by material unrealised mark-to-market losses due to higher rates on asset valuations and translated into an ROE of 5.2%. Performance during the first half of 2025 was strong in the institutional retirement division and offset weaker results of the asset management division as it pivots towards higher-margin products and invests in growth.

L&G holds a leading position in the United Kingdom market across bulk annuities, protection products and asset management services. The group benefits from good diversification of earnings with a comprehensive offering of end-to-end pension de-risking and retirement solutions. L&G is continuing its expansion into the North American pension risk transfer market, maintaining a strategic relationship with Meiji Yasuda Life Insurance Company (Meiji), as part of the planned sale of its U.S. protection business, as well as to establish a strategic partnership with Meiji to grow the U.S. protection business and to establish a strategic partnership with Meiji to grow the U.S. pension risk transfer (PRT) business with Meiji taking a 20% interest in L&G’s U.S. PRT business. In this partnership, L&G will retain 80% of new and existing U.S. PRT business through reinsurance agreements and serve in an asset managerial role, leveraging its expertise as a leader in the United Kingdom.

Moreover, the group’s asset management division provides a further degree of diversification to its business profile as one of the largest asset managers worldwide.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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