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Legal & General Group will increase its dividend by 20 percent after posting better-than-expected full year earnings and issuing a bullish outlook for 2013.

The insurance and pension group, which is also the biggest investor in the UK stock market, said full year earnings per share rose 12 percent to 13.9 pence each. Profit after tax was £801m, the company said in a statement published on its website, an 11 percent advance on last year. The group's assets under management grew 9 percent to £406bn and attracted around £7.1bn in new client inflows.

"Legal & General's double-digit sales growth in 2012 broke records, again demonstrating that customers value our insurance, savings and investment propositions. An uncertain, sluggish economy has had minimal impact," said CEO Nigel Wilson. "The more important growth drivers for us are ageing populations, falling state spending on welfare and new long-term investment opportunities as banks retrench. Our expertise, scale and synergies enable us to provide solutions to these challenges, placing us squarely among the beneficiaries from these structural changes."

The dividend increase takes the 2012 payment to 7.65 pence each, the company said. Return on equity for shareholders was measured at 15.5 percent.

The group appointed former Resolution boss Wadham Downing to oversee its merger and acquisition team in January, with Wison promising at the time "a selective M&A strategy meeting strict and attractive criteria." Wilson said in Wednesday's statement that "Our financial strength enables us to continue to deliver strong organic growth, complemented by bolt-on acquisitions, where they can meet our rigorous financial and strategic criteria."

Legal & General shares rose 0.7 percent to change hands at 163.9 pence each in early London trading. The shares have risen 12.5 percent so far this year.

London