Legal & General Group

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 pic in the 1970s (following a United Kingdom corporate law initiative aimed at making clearer the distinction between “public” [henceforth a pic] 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.

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