UK insurance - Legal & General hits back at 'confusion' over reserving levels


London-based insurer Legal & General has hit back at suggestions it will require a £864 million capital injection because of a massive underestimating of likely bond defaults levels in 2009. A capital injection of this level would eclipse its 2007 operating profit of £658 million - but a senior figure at the company dismissed this argument, say the analysis was "confused".

According to a research note published by JP Morgan, Legal & General's assumption of a 30 basis point for defaults - the

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