AM Best affirms Legal & General ratings with stable outlook

AM Best affirmed the Long-Term Issuer Credit Rating of "a" (Excellent) at Legal & General Group Plc and the Financial Strength Rating of A+ (Superior) at its two rated companies. The agency also affirmed "aa-" Long-Term ICRs at Legal and General Assurance Society Limited and Legal & General Reinsurance Company No. 2 Limited.

The affirmation, published Oct. 28, carries a stable outlook. AM Best assesses the group's consolidated balance sheet strength as very strong, with risk-adjusted capitalisation at the strongest level on its BCAR measure, and calls interest coverage adequate. It also cites excellent financial flexibility through capital-market access and good fungibility of capital across the group.

AM Best estimated consolidated adjusted financial leverage at year-end 2025 at 52.2% excluding the contractual service margin, net of tax, and 15.3% including it. For buyers of L&G subordinated debt, the 15.3% figure depends on the margin counting as capital; AM Best treats equity credit for hybrid debt as weaker-quality capital.

For advisors, the affirmation leaves the credit assessment on L&G's rated companies and subordinated debt unchanged. The stable outlook means AM Best does not expect a near-term revision to that view.

L&G's four-year average return on equity was 12.2% from 2022 to 2025, and net profit rose to £616 million in 2025 from £195 million in 2024, according to AM Best. Core operating profit rose across all divisions in the first half of 2026. The agency describes L&G as holding a leading UK position in pension risk transfer, protection and asset management. After selling its U.S. operations to Meiji Yasuda Life Insurance Company, the group retained an 80% economic interest in new and existing U.S. PRT business through reinsurance agreements and continues in an asset-management role.