UK life insurer Legal & General pointed to record new business as it announced a 43% increase in 2005 profits in spite of increasing competition from its home market.

Within the UK, life and pensions profits saw a 69% increase to GBP801 million, largely due to strong growth in new business volumes and increased margins in key product areas.

The group said profits from in-force business increased substantially, reflecting a growing book of business and favorable operational experience.

The group’s board also recommended a final dividend of 3.63 pence per share, an increase of 5.2%, bringing the total dividend for the year to 5.28 pence, an increase of 4.3%.

Group chief executive Tim Breedon said: 2005 was another record year for Legal & General – record new business and record profits. We outperformed the UK market in terms of new business growth and, at the same time, we have improved margins across the board on non profit business.

Our key strength lies in the flexibility of our business model and our ability to embrace change. I am convinced that our business has strong foundations and very real opportunities for growth, he added.