UK Insurance - Legal & General shifts away from default position

News

Followed a sustained bout of industry and analyst speculation, London-based insurer Legal & General has quadrupled the default assumptions for its corporate bond portfolio, requiring it to put up an additional £650 million of capital to deal with a likely deterioration in the corporate bond market in 2009.

Legal & General raised the default rate for corporate bonds - which are mainly used to back large annuity portfolios - to 130 basis points of par for the next four years. After this, the insure

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