M&G shares declined 1.6% to 337.6p on Tuesday after the insurer reported a £165 million after-tax loss for the first half of 2026, a sharp reversal from the £248 million profit recorded in the same period a year earlier.
The company attributed the loss to £551 million in adverse short-term investment return fluctuations, including a £325 million pre-tax charge tied to proposed changes in ground-rent legislation. Despite the headline loss, M&G’s adjusted operating profit rose 15% year-over-year to £435 million, exceeding the £429 million consensus among analysts and marking the strongest first-half result since the firm’s 2019 listing.
Asset Management profit increased 24% to £159 million, while Life profit grew 9% to £375 million. Net inflows from open business totaled £2.4 billion, surpassing market expectations of £1.9 billion. Operating capital generation, however, declined to £372 million from £408 million in the prior-year period, reflecting lower short-term interest rates.
CEO Andrea Rossi emphasized a strategic pivot toward "high-quality and capital-light earnings," which now account for 80% of total adjusted operating profit. The company’s shares remain above their 52-week low of 248.6p but have retreated from a recent high of 367p.
The broader market context weighed on sentiment, with the FTSE 100 down 0.3% at 10,756.45 amid rising gilt yields, oil prices above $95 per barrel due to renewed US-Iran tensions, and persistent inflation concerns.
