Legal & General is handing shareholders £1.2 billion in its biggest-ever buyback – here’s why the insurer is suddenly flush with cash
Legal & General, the British insurance giant, is set to return £1.2 billion to shareholders through its largest-ever share buyback program, kicking off this week.
Combined with a 2% bump in its dividend per share, the move will deliver a total of £2.4 billion in returns over the next year, music to the ears of investors in a volatile market.
The announcement comes alongside the company’s full-year 2025 results published on Wednesday (11 March), which paint a picture of robust growth and strategic sharpening under CEO António Simões.
Core operating profit climbed 6% to £1.623 billion, while core earnings per share jumped 9% to 20.93 pence. IFRS profit before tax more than doubled to £807 million from £332 million the prior year, fueled by stronger performances across its key divisions.
Why the cash splash?
At the heart of the share buyback is a combination of operational strength, savvy dealmaking, and a laser focus on high-growth areas like pensions and asset management.
Legal & General has been riding a wave of demand for long-term investments and retirement products, capitalizing on aging populations and shifting pension landscapes in the UK and beyond.
A major catalyst is the company’s recent transaction with Japan’s Meiji Yasuda Life Insurance. Legal & General is offloading its non-retained US protection business, a move expected to generate more than £1.3 billion in IFRS profit.
This deal not only streamlines the company’s portfolio but also bolsters its balance sheet, directly enabling a £1 billion portion of the buyback.
“We have addressed legacy complexities, strengthened our foundations, and we are driving forward our growth strategy across our core businesses,” Simões said in an accompanying statement. “As a sharper, more focused business, we are well-positioned to capitalise on the structural, growing demand for long-term investments and retirement income.”
This isn’t a one-off windfall. Legal & General plans to return more than £5 billion to shareholders between 2025 and 2027, blending dividends and buybacks.
The strategy reflects confidence in its synergistic model, where successes in annuities and workplace pensions feed into asset management growth.
