The insurer and asset manager still managed to beat market expectations. Adjusted operating profit, which excludes the write-down, rose 15% to £435m for the first half of 2026, best first-half result since listing in 2019, driven by growth in its asset management business, 9% growth in life and £2.4 billion of net inflows from open business.

Housing Secretary Angela Rayner was a key advocate for a £250 annual cap on pre-existing ground rents, referring to the annual fees paid by current leaseholders to a freeholder for the land beneath an older property, which doesn’t apply to Scotland.

The group’s shareholder fund holds around £722m in UK ground rent assets, which generate income streams to pay future customer pensions. M&G recognised the write-down after the cap limited the cash flows freeholds could collect, reducing the value of the asset.

Group chief executive at M&G Andrea Rossi said in March: “We are disappointed that we have not been able to agree on a proportionate solution that works for all parties.”

The firm’s assets under management increased to £387bn, from £355bn at the end of June 2025 and £376bn at the end of last year. Its asset management division reported an adjusted operating profit of £159m, up from £128m for the same period in 2025 benefitting from higher recurring revenues of £565m, up from £514m, underpinning a £22m increase in fee-based earnings.

External client assets grew to £189bn (53% of total asset management), of which £110bn was from international clients. It also reported a £13m increase in asset management revenue, thanks to it attracting clients interested in its private markets. 

Net inflows were at £1.3bn and private markets assets under management stood at £83bn. M&G’s life business adjusted operating profit also saw a slight increase from £344m in the first half of 2025 to £375m for the first half of 2026, driven by higher results in PruFund and traditional with-profits, reflecting the higher opening CSM, more than offsetting a lower contribution from annuities.

The CSM grew by 6% to £7bn from £6.6bn as of 31 December 2025. Growth was driven by an operating change of £54m and positive market and other movements of £309m.

Corporate Centre loss increased year-on-year to £99m, from £94m, due to lower interest income, driven by lower short-term interest rates, and slightly higher head office costs.

However, M&G reported that operating capital generation fell year-on-year, from £408m to £372m, mainly due to movements in the capital requirements of the asset management and corporate centre segments.

Despite the first half loss, the group announced its first interim dividend of 6.8 pence per share, which will be payable on 16 October 2026. It is confident it will deliver low double digit growth for the full year and is on track to meet its £2.7bn operating capital generation target by 2027.

He said: “Net inflows from open business of £2.4bn reflect the breadth and strength of our offering, with asset management delivering £2.2bn of net inflows from external clients, including £700m through our partnership with Daiichi Life Group.

M&G continues to grow and transform, becoming a more diversified, efficient, and capital-light business. With a clear strategy, disciplined execution and the right resources in place, I am confident in our outlook for the second half of 2026 and in our ability to deliver sustainable long-term value for customers, clients and shareholders.”