Legal & General Group plc stock rises on strong FY25 results and strategic US asset sale completion

Legal & General Group plc stock climbed on the London Stock Exchange following the release of full-year 2025 results that exceeded market forecasts, coupled with the completion of a transformative US asset sale. The shares were last seen on the London Stock Exchange at 243.00 GBX, up 1.55% in recent trading amid positive analyst revisions. For US investors, this combination signals robust capital returns and growth in high-margin Pension Risk Transfer (PRT) business, offering a compelling 9% dividend yield in a yield-hungry market.

As of: 26.03.2026

By Elena Hargrove, Senior Insurance Sector Analyst: Legal & General's FY25 performance underscores its pivot to capital-light PRT deals, positioning the firm as a global leader amid rising demand for pension de-risking solutions relevant to US retirement trends.

FY25 Results Drive Immediate Stock Momentum

Legal & General Group plc unveiled its FY25 financial results on March 25, 2026, posting operating profit ahead of consensus estimates as the insurer advances its strategic overhaul under CEO Antonio Simoes. Key highlights included resilient revenue growth and strengthened solvency metrics, with analysts at AlphaValue/Baader Europe promptly lifting earnings forecasts: EPS for 2026 raised to 20.0p from 16.3p (+23.2%), and 2027 to 22.7p from 17.8p (+27.6%). This upgrade reflects confidence in the group's streamlined model post-restructuring.

The results cap a year of execution on simplification efforts, including divestitures and a focus on core segments like Institutional Retirement. On the London Stock Exchange, the Legal & General Group plc stock responded positively, advancing from recent lows around 234.30 GBX to 243.00 GBX. Market reaction underscores investor approval of the firm's progress toward sustainable returns, with a forward PE of 10.62 suggesting undervaluation relative to growth prospects.

Revenue for the trailing twelve months stood at 12.45 billion GBP, supporting net income of 263 million GBP. The high dividend payout of 0.21 GBP per share, yielding 9.08%, remains a cornerstone attraction, particularly as the board eyes further capital returns.

US Asset Sale to Meiji Yasuda Unlocks Shareholder Value

A pivotal catalyst was the February 2, 2026, completion of the sale of Legal & General's US insurance entity to Meiji Yasuda, generating 1.2 billion GBP in Solvency II capital and over 1.3 billion GBP in IFRS profit. Proceeds of 1.8 billion GBP, net of own funds adjustments, enable an additional 1 billion GBP share buyback, elevating the 2026 total to 1.2 billion GBP. This transaction fortifies the group's US PRT proposition through a long-term partnership, with Meiji Yasuda taking a 5% economic interest in Legal & General.

The deal boosts proforma FY25 Solvency II coverage by approximately 7 percentage points post-buyback, enhancing financial flexibility. For shareholders, it translates to tangible returns amid a yield-scarce environment. Legal & General's strategic retreat from capital-intensive US life insurance sharpens focus on higher-return PRT, aligning with global de-risking trends.

Meiji Yasuda's involvement deepens bilateral ties, potentially opening doors for future reinsurance collaborations. This move exemplifies Legal & General's capital recycling strategy, redirecting resources to growth areas like institutional retirement.

Pension Risk Transfer Momentum Builds Globally

Legal & General's Institutional Retirement division continues to thrive, exemplified by the 1.4 billion GBP buy-in with the Sanofi Pension Scheme, securing benefits for 4,900 retirees and 5,600 deferred members. This follows a 760 million GBP partial buy-in in 2021, fully insuring the scheme. In H2 2024 alone, the group completed four PRT deals exceeding 1 billion GBP each, totaling 10.5 billion GBP globally for the year.

PRT involves insurers assuming pension liabilities via buy-ins or buy-outs, de-risking sponsors while generating stable, long-duration fees for providers. Legal & General's expertise positions it as a UK leader extending into the US, where similar pressures from underfunded schemes create tailwinds. Assets under management reached 1.1 trillion GBP by HY25, with 43% international exposure including significant US allocations.

This segment's capital-light nature supports margin expansion, contrasting with traditional insurance volatility. Partnerships like the recent global tie-up with Manulife Wealth & Asset Management further diversify revenue streams.

Asset Management and Diversified Revenue Streams

Beyond retirement, Legal & General manages 1.118 trillion GBP in assets across indexed funds, securities, and alternatives. The group operates in life insurance, retirement savings, non-life insurance, and asset origination, employing 10,500 staff. FY25 results highlighted synergies between public and private markets, driving 11.80% revenue growth to 10.99 billion GBP in 2025.

Strategic partnerships, such as with Hyde Group for affordable housing and efforts to combat under-saving via pension engagement initiatives, broaden its societal impact. Research shows midlifers least engaged with pensions, prompting L&G's convening of new efforts assuming 4.1% real growth in balanced portfolios.

Diversification mitigates risks from any single line, with international assets comprising nearly half the portfolio. This global footprint appeals to US investors seeking exposure to stable European financials.

Why US Investors Should Watch Legal & General Closely

US investors gain indirect exposure to Europe's pension de-risking boom via Legal & General's London-listed shares (LON:LGEN), which trade as ADRs in the US. The 9.08% yield dwarfs US peers, bolstered by £1.2 billion 2026 buybacks funded by asset sales. PRT growth mirrors US trends, where defined-benefit plans face similar liabilities amid longer lifespans and low rates.

With 500 billion GBP in international assets, including US-focused strategies, L&G offers diversification from domestic insurers. Goldman Sachs and RBC analyses post-results affirm upside, with price targets adjusted higher despite broader market pressures. Beta of 1.13 indicates moderate volatility, suitable for yield portfolios.

Regulatory alignment between UK Solvency II and US frameworks eases cross-Atlantic appeal. As US hyperscalers and corporates eye global efficiency, L&G's scale in retirement solutions provides a proxy for structural shifts.

Key Risks and Open Questions Ahead

Despite strengths, Legal & General faces execution risks in its transformation, including integration of sale proceeds and PRT scaling. Solvency pressures from catastrophes or claims inflation could strain ratios, though current buffers appear solid. Analyst revisions like RBC's earnings cuts post-results highlight potential for volatility.

Market sensitivity to interest rates persists, as duration mismatches affect PRT pricing. Geopolitical tensions, noted in L&G's EMs analysis, may impact asset management returns. Competition from US giants like Athene or Apollo in PRT intensifies globally.

Shareholder dilution risks from partnerships remain low, but dividend sustainability hinges on recurring profits. Investors should monitor Q1 updates for buyback progress and pipeline visibility.

Disclaimer: This is not investment advice. Stocks are volatile financial instruments.