StockMarketWire.com - Insurance company Legal & General reported a plunge in first-half profit as increased claims related to Covid-19 and lower interest rates weighed on performance.

The company, however, held its dividend steady.

For the six months ended 30 June, pre-tax profit fell 73% to £285m on-year, with the company estimating Covid-19 related events reduced operating profit by £129m.

Legal & General's capital division saw operating profit decrease 29% to £123m, principally reflecting lower profits from its direct investment portfolio owing to a pause in traditional house-building activities during the UK lockdown.

Its insurance business reported operating profit decreased 34% to £88m, reflecting increased claims experience due to Covid-19, and a fall in interest rates, which reduced the discount rate used to calculate reserves. Legal & General investment management saw assets under management rise 4% to £1.24bn.

The interim dividend was left unchanged at 4.93p per share.

'In H1, Legal & General delivered resilient operating profits, a robust balance sheet and highly relevant products and services. Our ambition is for a similar performance in H2,' the company said.

'Having achieved our five year ambition of 10% EPS CAGR (58% growth over the period) in just four years, we plan to update the market on our ambitions at a capital markets event on 12 November 2020,' it added.

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