Legal & General (L&G) has reported a 11% increase in adjusted operating profit for 2016 to £1.628bn.

Legal & General Retirement (LGR) achieved record operating profits of £811m driven by strong performance from its front and back books, as well as benefitting from higher levels of longevity reinsurance on new business.

Longevity experience in the year was once again positive compared to the business’s assumptions.

LGR’s annuity assets were up 25% at £54.4bn.

Nigel Wilson, group chief executive, said:”Our long term approach to strategy and investment coupled with outstanding execution has again delivered terrific financial performance in 2016. Profit before tax up 17% to £1.6 billion, net release from operations up 12% to £1.4 billion, EPS up 19% at 22.2p and a return on equity of nearly 20%.

“We believe the UK remains a great place for us to help fill the huge funding gaps and under-provision of key financial products. We are playing our part to regenerate the UK’s cities, delivering economic growth and jobs, capitalise on its world-leading universities and improve commercialisation of its scientific discoveries. Additionally, we are accelerating the evolution of our US businesses.

“We look forward to the future with confidence as our core markets are growing, our market share is increasing, our balance sheet is strong and we have positive cash and earnings momentum. Through a combination of selective hiring and internal promotions we have significantly strengthened our management team and technology capability.”

Sir John Kingman, L&G’s chairman, added: “Legal & General has a strong management team and formidable further potential. Against that backdrop, the Board has considered the best trajectory of dividend growth, taking into account sustainability across a wide range of economic scenarios and the group’s anticipated financial performance. Accordingly, the board has recommended an increase in the full year 2016 dividend of 7%.”