LONDON, Aug 15 Reuters British life insurer and asset manager Legal General recorded a 10 drop in assets under management in the year to end June, it said on Tuesday, overshadowing a firsthalf operating profit beat and sending its shares lower.

High inflation and interest rates have hit asset values and investor demand, with fund managers such as abrdn also seeing assets fall.

Official data on Tuesday showed higherthanexpected wage growth in Britain, boosting the chances of further Bank of England interest rate hikes.

Legal General Investment Management, one of the biggest investors in the UK stock market, recorded assets under management of 1.2 trillion pounds 1.52 trillion at endJune, and external net outflows in the first half of 12.3 billion pounds.

However, the insurer reported a forecastbeating operating profit in the same period, boosted by its bulk annuity business.

Higher UK interest rates have improved the funding positions of defined benefit, or final salary, pension schemes, enabling employers to offload pension risk to an insurer through a socalled bulk annuity more cheaply.

Outgoing Legal General CEO Nigel Wilson described the results as mixed in a call with Reuters, but said the insurer was seeing slightly more tailwinds than headwinds.

The group has named Banco Santander executive SAN.MC Antonio Simoes to replace Wilson, who is retiring at the end of the year.

LG39;s operating profit came in at 941 million pounds, down 2 from a year earlier but…