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Rising interest rates benefit the CEO of Legal & General.

LONDON (Reuters) -Legal & General’s business is doing well because interest rates are going up, the company’s CEO said on Tuesday. At the same time, the British life insurer reported an 8 percent increase in operating profit for the first half of the year, which was better than expected, and said it was on track to meet or exceed its financial goals.

This year, the markets have gone down because central banks have raised interest rates quickly to fight inflation.

But higher interest rates are usually good for life insurers because it means they don’t have to set aside as much money for future pension payments.

“We are beneficiaries of global interest rate increases,” CEO Nigel Wilson told Reuters, adding that inflation was being driven by energy prices, which are expected to decline.

Inflation expectations will decline from their current level.

According to the company, bulk annuities—insurance of employer defined benefit pension systems—and its housing businesses bolstered L&G’s performance.

One of the biggest investors in the UK stock market, Legal & General Investment Management, saw third-party inflows more than quadruple from the first half of 2021 to $79,25 billion, or 65.6 billion pounds.

Wilson stated that L&G was garnering a greater volume of investment than its smaller competitors because savers and investors were turning to larger organizations to help them through adverse economic conditions.

Assets under administration, on the other hand, fell by 3% year on year to 1.29 trillion pounds.The unit’s operational profit decreased by 2%.

On Tuesday, rival asset manager ABRN reported a 6% decline in assets under management and administration for the first half. In comparison, Schroders (LON: SDR) increased by 1% over the same period last month, aided by strong performance in alternative assets.

L&G’s operating profit of 1.16 billion pounds exceeded the company-provided consensus of 1.12 billion.

At 07:29 GMT, L&G shares were down 0.5% versus a stable FTSE 100. Analysts at KBW called the results “decent,” and they stuck with their recommendation that the company “market perform.”

L&G declared an interim dividend of 5.44 pence per share, an increase of 5%.

$1 equals 0.8275 pounds.

One dollar equals 0.8277 pounds.

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