Legal And General Stock and 2 Insurers Backed by Higher Gilt Yields

Long term government bond yields in the UK and across major markets have shifted sharply higher, and that is reshaping which stocks feel pressure and which feel support. For investors who watch life insurers and annuity providers, this move can change how balance sheets and earnings risks are viewed. This article walks through three stocks from our UK and European screener that appear positively exposed to this rate backdrop.

The three stocks covered below are just a starting sample, and the full screen surfaced 5 more UK and European life insurance and annuity companies with equally compelling rate exposure stories that are not unpacked in this article. To go deeper into this theme, identify your own shortlist and analyze each business directly, then head straight into the UK and European Life Insurers and Annuity Providers Benefiting from Higher Long-Term Yields screener.

Legal & General Group (LSE:LGEN)

Overview: Legal & General Group is a large UK based life insurer and retirement provider that uses long term customer premiums to back pensions, annuities and protection policies with bond heavy investment portfolios. It also runs a sizeable asset management arm and retirement products business in the UK, US and other markets, all tied closely to how long dated bond markets behave.

Operations: Legal & General Group generates most of its revenue from Institutional Retirement at about £6.1b, with further contributions from Insurance at about £2.2b, Retail Retirement at about £1.8b and Asset Management at about £1.2b. The bulk of this activity is in the United Kingdom, which accounts for about £10.4b of revenue.

Market Cap: £16.0b

Legal & General Group offers exposure to higher long term gilt yields because it writes large annuity and pension contracts and invests those long dated liabilities into bonds, so better yields can support investment returns, solvency and the appeal of guaranteed income products. At the same time, investors need to weigh issues like dividend coverage, reliance on external funding and a history of volatile earnings against strengths such as a large UK retirement franchise, a growing asset management business and ongoing asset optimisation efforts in a higher yield environment. The recent focus on capital management, solvency above 200% and tenders for older debt shows a management team actively reshaping the balance sheet.

Legal & General Group is reshaping its balance sheet around higher gilt yields. However, the full story sits in the detailed capital and earnings trade offs buried inside the 3 key rewards and 2 important warning signs (1 is major!)

NN Group (ENXTAM:NN)

Overview: NN Group is a Dutch insurer that focuses on life, pensions and protection products, using long term customer premiums to back guaranteed promises with portfolios of sovereign and corporate bonds that directly link it to the higher yield theme. Alongside this, it runs non life insurance, savings, investment and mortgage services for individuals, SMEs and corporates across the Netherlands, wider Europe and Japan, giving the group multiple profit streams that all rely on disciplined balance sheet management.

Operations: NN Group generates most of its revenue from Netherlands Life at about €7.7b, with further contributions from Insurance Europe at about €3.9b and Japan Life at about €654m, alongside a €5.7b segment adjustment.

Market Cap: €20.2b

NN Group may appeal to investors who want a life insurer that is closely tied to long dated bond markets and has reported improving fundamentals. Higher long term yields can help its life business earn a wider spread on the sovereign and corporate bonds backing pensions and guarantees, and recent results showed €1.1b in operating capital generation and a Solvency II ratio of 224%, which supports that balance sheet profile. At the same time, investors may want to monitor factors such as regulatory costs, climate related claims in non life and the fact that the dividend is not well covered by free cash flow. The overall assessment for NN Group depends on how those yield sensitive spreads, capital strength and payout ambitions interact over the next few years.

NN Group’s capital generation and 224% Solvency II ratio may be masking a deeper story about how long term yields reshape its payouts and growth plans. Get the full picture in the NN Group financial health report

Standard Life (LSE:SDLF)

Overview: Standard Life is a UK based long term savings and retirement company that focuses on workplace pensions, individual pensions and a wide range of annuity products, all closely tied to long dated bond portfolios that are sensitive to higher long term yields. Through brands such as Standard Life, SunLife and Phoenix Life, it manages defined contribution and defined benefit pension income, lifetime and fixed term annuities and other retirement solutions for customers across the UK and Europe.

Operations: Standard Life generates its operating result largely from Retirement Solutions at about £2.5b, partly offset by negative contributions from Pensions & Savings at about £1.6b, With-profits at about £2.1b and Europe & Other at about £554m, with most activity in the United Kingdom at about £6.3b in revenue.

Market Cap: £9.4b

Standard Life gives you direct exposure to higher UK gilt yields because its annuity and pension risk transfer books are backed by sizeable fixed income portfolios that management has been tilting further into gilts and other government bonds. Earnings are currently under pressure, with losses, negative return on equity and a dividend that is not well covered by cash. Forecasts point to a potential shift to profitability and stronger capital efficiency if the business delivers on its long term savings and retirement plans. At the same time, heavy reliance on external borrowing and complex hedging means higher yields can be a double edged sword for funding costs and reported earnings. The upcoming H1 2026 results and investor day will be key touchpoints for how Standard Life is using this higher yield backdrop to reshape its balance sheet and long term returns.

Standard Life’s earnings reset and higher gilt exposure may be hiding a very different future than the headline losses suggest. Get the context in the analyst forecasts for Standard Life

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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