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Legal & General Group
Who are Legal & General's customers?
Understanding customer demographics and target market is paramount for any company's sustained success, particularly in the dynamic financial services sector. For Legal & General, this understanding is crucial for tailoring its diverse offerings in investment management, retirement solutions, life insurance, and general insurance. Originally established with a vision to provide life assurance, its market focus has significantly evolved from its foundational roots.
The company's strategic refresh, unveiled on June 12, 2024, sharpened its focus on three core divisions: Institutional Retirement, Asset Management, and Retail. This pivot reflects adaptation to demographic shifts, evolving customer needs, and market opportunities, such as the growing demand for pension risk transfers and private market investments. Legal & General's ability to maintain strong financial performance, with a 6% growth in core operating profit in 2024, demonstrates the effectiveness of its customer-centric approach.
What is Customer Demographics and Target Market of Legal & General Group Company? Legal & General's customer base spans individuals seeking life insurance and retirement planning, to large institutions requiring sophisticated asset management and pension risk transfer solutions. Their Legal & General Group BCG Matrix analysis would likely show a diverse portfolio catering to different market segments and growth potentials.
Who Are Legal & General Group’s Main Customers?
The company's primary customer segments are defined by its three core business divisions: Institutional Retirement, Asset Management, and Retail. This segmentation allows for tailored approaches to diverse client needs, from large-scale pension de-risking to individual savings and investment goals.
Institutional Retirement (B2B)
This segment targets businesses and pension schemes, primarily focusing on Pension Risk Transfer (PRT) globally. The company is a leader in UK Defined Benefit (DB) pension transfers, anticipating an average of £45 billion annually in UK PRT volumes over the next decade. In 2024, international volumes reached a record £2.3 billion, with significant growth in the US and Canada, indicating a focus on large, long-term institutional clients.
Asset Management (Institutional & Wholesale)
This division, formed in 2024, manages £1.1 trillion in global assets under management (AUM), with 44% managed internationally. It serves both institutional and wholesale clients seeking public and private market investment solutions. There's a strategic aim to grow private market AUM to £85 billion by FY 2028, alongside growth in UK DC and Wholesale segments.
Retail (B2C)
Serving individual consumers in the UK and US, this division offers annuities, drawdown products, workplace savings, and insurance. In 2024, operating profit rose 12% to £504 million. The UK individual protection customer base reached 5.4 million, with an additional 1.5 million in the USA. Retail Annuities saw record new business sales of £2.1 billion, a 48% increase.
Workplace Savings & Individual Protection
The Workplace DC business experienced £6.0 billion in net flows and serves 5.5 million members, highlighting a focus on individuals saving for retirement through employment. The company's retail customer base is diverse, utilizing both digital and traditional service channels to meet varied needs.
Strategic Focus and Market Opportunity
The company has strategically simplified its portfolio, divesting non-core assets to concentrate on growth areas like pension risk transfers and evolving asset management needs. This strategic realignment is informed by market research and external trends, reflecting a proactive approach to capitalize on significant market opportunities.
- Institutional Retirement: Focus on B2B pension de-risking.
- Asset Management: Global AUM of £1.1 trillion, targeting private market growth.
- Retail: Serving UK and US individuals with diverse financial products.
- Strategic Divestments: Streamlining operations for focused growth.
- Market Trends: Responding to opportunities in pension transfers and asset management.
What Do Legal & General Group’s Customers Want?
Legal & General's customer base is diverse, united by fundamental needs for financial security, wealth accumulation, and protection against life's uncertainties. Understanding these varied requirements is key to their market approach.
Institutional Pension De-risking
Institutional clients in the retirement segment prioritize de-risking defined benefit pension schemes. They seek reliable pension risk transfer solutions to secure member benefits and manage longevity risk effectively.
Sophisticated Investment Solutions
Asset management clients, including large institutions and wholesale investors, demand sophisticated investment strategies. They look for scale, profitability, diversification, and investments aligned with responsible investing principles.
Retail Financial Security
Individual and family customers primarily seek financial protection, savings, and retirement planning solutions. They value financial stability, peace of mind, and accessible services for future life stages.
Streamlined Claims Processing
A key customer preference is for simplified financial processes. The company addresses this by offering digital self-serve portals, which reduced additional medical information requests for Critical Illness claims by over 25% in 2024.
Long-Term Retirement Planning
Individuals saving for retirement are a significant customer group. The company's Workplace DC business caters to these needs, emphasizing long-term financial planning and accessible retirement solutions.
Customer-Centric Product Development
Product development is guided by customer needs, ensuring value and clarity. This approach aims to create offerings that are easily understood and meet specific customer requirements effectively.
Meeting Diverse Financial Goals
Legal & General's customer segmentation analysis reveals a focus on individuals and institutions with distinct financial objectives. These range from securing retirement benefits for employees to growing wealth through sophisticated investment vehicles.
- Institutional clients are motivated by de-risking pension liabilities, with the annuity portfolio reaching £92 billion in FY 2024.
- Asset Management clients seek scale, profitability, and responsible investing, with targets for cumulative Annualised Net New Revenues between £100-150 million from 2025 to 2028.
- Retail customers prioritize financial protection and savings, with digital tools enhancing their experience, such as processing over 20,000 protection claims in 2024.
- The company's target market includes individuals and families seeking long-term financial security and peace of mind.
- Understanding the Legal & General customer profile involves recognizing their need for accessible, understandable, and valuable financial products and services.
- The company's approach to meeting customer needs is evident in its diverse product offerings and commitment to simplifying financial planning, as detailed in the Revenue Streams & Business Model of Legal & General Group article.
Where does Legal & General Group operate?
Legal & General Group's geographical market presence is predominantly anchored in the United Kingdom, where it holds a leading position in financial services. The company is also actively expanding its international footprint, particularly in North America and parts of Europe.
UK Market Dominance
In the UK, Legal & General is a major player in institutional retirement, retail savings, and protection products. The company is a market leader in Pension Risk Transfer (PRT), with projected annual volumes of £45 billion over the next decade. Its UK retail protection business served 5.4 million individual customers in 2024.
International Expansion
Internationally, the company has established strong positions in the US and Canada for its Institutional Retirement business. In 2024, it achieved record international PRT volumes of £2.3 billion, with US PRT new business premiums reaching $525 million (£417 million) in H1 2024.
Global Asset Management
The Asset Management division manages approximately 44% of its £1.1 trillion global Assets Under Management (AUM) internationally. This global reach allows for localized strategies to cater to diverse market needs.
Strategic Growth Areas
Legal & General is also exploring a partner model in the Netherlands for PRT and is developing its proposition in the Canadian PRT market. This demonstrates a commitment to global growth and meeting evolving client needs across different regions.
The company's global operations span numerous locations, including Chicago, Stamford, Frederick, Bermuda, Tokyo, Hong Kong, Singapore, Dublin, Stockholm, Amsterdam, Frankfurt, and Milan, in addition to its UK offices. This extensive network supports its international diversification efforts, allowing it to tailor offerings and marketing to succeed in varied markets. Understanding the Brief History of Legal & General Group provides context for its current market positioning and strategic expansion.
How Does Legal & General Group Win & Keep Customers?
Legal & General employs a comprehensive strategy for acquiring and retaining customers, blending digital innovation with established relationships. The company focuses on building lasting value and engagement across its diverse customer base.
Institutional Client Acquisition
For institutional clients, particularly in Pension Risk Transfer (PRT), acquisition is driven by strong market positioning and long-standing relationships. The company's expertise in handling large-scale de-risking deals, such as the £1.1 billion transaction with SCA UK pension plan in July 2024, is key.
Asset Management Growth
Customer acquisition and retention in Asset Management are supported by expanding client offerings and sophisticated investment solutions. The integration of LGIM and LGC in 2024 aims to leverage synergies for growth in public and private markets.
Retail Customer Engagement
For retail customers, the company utilizes a mix of digital services and traditional channels, emphasizing its lifetime retail proposition. Leveraging the growing Workplace DC platform is a significant acquisition channel.
Digital Transformation for Retention
Digital transformation is central to retention and acquisition, with investments in AI and data analytics enhancing customer experience. The online claims submission capability launched in 2024 streamlined processes, improving customer loyalty.
The company's commitment to providing fair value and robust product governance directly contributes to customer retention. These strategies collectively support the Mission, Vision & Core Values of Legal & General Group, ensuring a strong and loyal customer base.
Pipeline for PRT Deals
Legal & General is actively pricing on £17 billion of new UK PRT deals and has visibility on a further £27 billion expected to transact in 2025, indicating a robust pipeline for new institutional clients.
Asset Management Revenue Targets
The company targets cumulative Annualised Net New Revenues of £100-150 million between 2025 and 2028 from its Asset Management division, with a significant portion expected from internal customer acquisition.
Workplace DC Platform Growth
In 2024, the Workplace DC business saw net flows of £6.0 billion and served 5.5 million members, demonstrating its effectiveness as a channel for acquiring retail customers.
Streamlined Claims Process
The launch of an online claims submission capability in 2024 reduced medical evidence requests by over 25% for Critical Illness claims, enhancing the customer experience and fostering loyalty.
Operational Efficiency
Investments in cloud computing, robotics, and data analytics are improving operational efficiency and customer service, including faster call resolution times through robotic process automation (RPA).
Customer Value Proposition
Providing products that meet customer needs and offer fair value, alongside robust product governance, are fundamental to retaining customers and building long-term relationships.
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- What is Growth Strategy and Future Prospects of Legal & General Group Company?
- How Does Legal & General Group Company Work?
- What is Sales and Marketing Strategy of Legal & General Group Company?
- What are Mission Vision & Core Values of Legal & General Group Company?
- Who Owns Legal & General Group Company?
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