L&G sees protection margins under pressure this year

LONDON (Reuters) - Insurer Legal & General (LGEN.L) expects margins for protection products to remain under pressure in 2008 as volumes drop on the back of a weaker housing market and competition heats up, its chief executive said.

L&G posted a 3.7 percent margin for its UK life and pensions business in the first half, flat on the same period last year, but saw margins in both annuities and protection business drop.

"We are certainly not pessimistic on protection margins going into the second half, but we are unlikely to see a recovery back to the level we enjoyed in 2007," Tim Breedon told reporters after the insurer released interim results.

L&G said earlier it planned to continue its 1 billion pound share buyback programme, due to complete by the end of this year, but Breedon said it was too soon to say whether the group would begin a new programme after that.

(Reporting by Clara Ferreira-Marques)