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Despite falling from £3.4 billion in June to £2.9 million at the end of September, the investor said it was confident that a further drop in equity markets would leave the firm with surplus capital of £2 billion.
A weakening of the stock markets and £111 million worth of share repurchases is believed to be behind Legal and General's lower capital, reports the Financial Times.
Time Breedon, Legal and General's chief executive, said the company's remains "at best cautious about the economic outlook for the UK."
In related news, recent research by uSwitch found that a growing number of people are cancelling their insurance policies to save cash during tough economic times.
Legal and General was established in 1836 and provides insurance to more than 5.75 million.
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